Eurozone inflation dips from two-year high. Eurozone inflation cooled in June temporarily easing fears that the currency bloc’s economic reopening will underpin price growth, though economists expect the pressures to gather pace again in the second half of the year. Consumer prices rose by 1.9 percent from a year earlier, down from a more than two-year high of two percent in May. The inflation rate had exceeded the European Central Bank's target of "below, but close to" two percent in May. Core inflation, a less volatile measure of inflation that excludes volatile items such as food and energy, slowed to 0.9 percent. With businesses battling supply shortages, worries have increased in some quarters that steep price gains will start to become entrenched.
German unemployment drops further in June as recovery gathers speed. German unemployment fell further in June as more workers joined the labour market in light of a strong recovery. This was helped by falling coronavirus infections and an easing of containment measures, data from the Federal Labour Agency revealed on Wednesday. The number of people out of work declined by 38,000 in June from the previous month, much more than the expected fall of 20,000. The unemployment rate remained unchanged at 5.9 percent in June, in line with expectations. Unemployment had decreased by 19,000 in May. Covid-19 cases have declined to their lowest level in months in Germany, allowing authorities to lift many restrictions, although they remain wary of the potential impact of the more contagious delta variant, whose share of new infections has been rising rapidly.
UK manufacturing growth slows in June. The UK manufacturing sector saw strong growth in June but the pace of expansion moderated from a record high, final survey results from IHS Markit showed on Thursday. The IHS Markit/CIPS Purchasing Managers’ Index dropped to 63.9 in June, down from May’s record high of 65.6. The reading was below an initial estimate of 64.2. A reading above 50 indicates expansion in the industry. Rob Dobson, director at IHS Markit, says: “UK manufacturing maintained a near survey-record pace of expansion at the end of the second quarter, as the reopening of economies at home and overseas supported increased production, new orders and employment.
US economic growth unrevised at 6.4 percent in first quarter. Data published by the US Commerce Department on Thursday points to a nation that has regained its footing quickly after being hit by the global pandemic. The US economy grew at a solid 6.4 percent rate in the first three months of the year, setting the stage for what economists believe might be the strongest year for the economy in about seven decades. Growth in the gross domestic product, the country’s total output of goods and services, was unchanged from two previous estimates, the Commerce Department said, an acceleration from the 4.3 percent pace of the fourth quarter. Economists believe that economic growth has continued to accelerate in the second quarter, as vaccinations become widespread and Americans eager to get outside are being welcomed by newly re-opened businesses.
China manufacturing activity slows. A private gauge of China's manufacturing activity fell to a three-month low in June, as a recent uptick in Covid-19 cases and supply-chain constraints weighed on output and dampened demand. The Caixin China purchasing managers index dropped to 51.3 in June compared with 52.0 in May, Caixin Media Co. and researcher Markit said on Thursday. The result points in the same direction as a competing official gauge, which slipped to 50.9 in June from 51 in May, China's statistics bureau said Wednesday. Both the Caixin and official surveys noted disruptions brought by softening external demand and coronavirus resurgences in China's Guangdong province, an export and economic stronghold.