3 July 2020
Eurozone unemployment rate rises less than expected in May. The unemployment rate in the eurozone rose less than expected in May, indicating that government measures to protect jobs within the currency bloc have been successful. The unemployment rate came in at 7.4 percent in May up from 7.3 percent in April but less than the 7.6 percent in the same month last year. May’s figure was also lower than the 7.7 percent predicted by economists. The slim increase in unemployment suggests that the measures are keeping mass unemployment at bay, although a number of these schemes will start to taper soon.
Fed officials see need for ‘highly accommodative’ policy ahead, minutes show. The minutes of the most recent Federal Reserve monetary policy meeting published on Wednesday show that officials had an in-depth discussion about capping bond yields and strengthening guidance about where policy will be set in the future. Policymakers note that “the current stance of monetary policy remained appropriate” but said the Fed should strengthen the guidance it provides to markets. The minutes noted a need for “highly accommodative monetary policy for some time” and said the conditions for that should be spelled out clearly. Central bankers left interest rates at close to zero at the session, as expected, and said they anticipate loose policy to prevail until the economy gets back to normal.
German unemployment rises less than expected in June. The number of people out of work in Germany rose far less than expected in June, data the by Federal Labour Agency showed on Wednesday, calming fears of mass layoffs in Europe’s largest economy. Unemployment surged in June taking the number of job losses in the second quarter to 678,000 and the total to 2.943 million people, just below the three million threshold that has not been broken since 2011. The unemployment rate was pushed to 6.4 percent from 6.3 percent the previous month. The number of redundancies was kept down thanks to generous state wage support, according to the agency.
UK house prices show first fall in eight years. UK house prices fell for the first time in eight years in June, a closely-watched survey showed. This damping hopes of a sustained recovery in the sector. House prices were 0.1 percent lower in June than the same month a year ago - the first annual fall since December 2012 - according to mortgage lender Nationwide. The same data set shows that property values dropped by 1.4 percent compared with May, as the coronavirus lockdown hit the housing market. The monthly fall was however less severe than a 1.7 percent decline recorded in May. Nationwide said the outlook for the housing market was "highly uncertain" in the coming months. Separately, the Bank of England reported that approvals of mortgages to purchase a home tumbled to 9,300 in May, their lowest level on record, from an already unprecedented low of 15,851 in April.
China manufacturing picks up in June. Results of a private sector survey released this week showed that China’s manufacturing activity expanded and beat expectations in June, reaching its highest level since December 2019, amid the country's efforts to mitigate the impact of the coronavirus epidemic. The Caixin/Markit manufacturing Purchasing Manager’s Index, or PMI, came in at 51.2. Economists forecasted a reading of 50.5, as compared to May’s 50.7. PMI readings above 50 signal expansion, while those below that level indicate contraction. The data also showed that the PMI for China's non-manufacturing sector came in at 54.2 in June, up from 53.6 in May.