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Here are today’s top stories:
US Jobs Growth Slows, Wages and Unemployment High: The Federal Reserve received mixed news today as new data revealed that US jobs growth in June fell short of expectations. While the economy added 209,000 new non-farm jobs, below the forecast of 225,000, hourly wage growth exceeded expectations at 4.4%. Unemployment rate also decreased slightly from 3.7% to 3.6%. Despite this, markets expect the Fed to continue increasing interest rates to combat inflation. Unlike yesterday’s global sell-off in response to rising private sector jobs data, today’s reaction was calmer. The Fed’s minutes from its last policy meeting and statements from policymakers indicated that additional rate hikes are on the horizon due to a tight labor market and inflation risks. The impact of all this on US consumers’ mood is explored in the new column by US editor at large Gillian Tett, who notes that optimism seems to be fading even with positive employment and inflation news and resilient retail sales.
UK and Europe Economy Updates: UK house prices fell by 2.6% in June, the largest annual drop since 2011. This has led to speculations that UK interest rates will reach 6.5% by next March, the highest level since 1998. In other news, the UK’s Financial Conduct Authority watchdog has called for faster progress from major banks in improving savings rates for customers. Meanwhile, India’s top trade official has expressed optimism about ongoing trade talks with the UK, downplaying obstacles related to work visas and opening up industries. The European Central Bank’s vice-president, Luis de Guindos, provided insights into underlying price pressures, indicating that they are starting to ease, but also stated that the ECB’s work is not finished. The Russian ruble has reached a 15-month low due to the impact of mercenary group Wagner’s failed insurrection and existing sanctions.
Global Economy Highlights: China’s anti-corruption investigators have turned their attention inward, highlighting the persistent nature of China’s corruption problem. Qatar, after extensive preparations and significant investment for the World Cup, is now exploring its potential as an investment destination. The Democratic Republic of Congo’s small-scale miners, who risk their lives to extract cobalt, essential for clean energy transition, face the challenge of meeting international standards. Jennifer Harris, a former White House official, has warned that the production of commodities like lithium may fall short of what is necessary for the clean energy transition.
Business Updates: Samsung’s operating profits have plummeted by 96% in the second quarter due to falling chip prices caused by oversupply, despite production cuts. The Dutch government has won the right to reduce flights at Amsterdam’s Schiphol airport to tackle noise and pollution. In contrast, London’s Gatwick airport has submitted plans to increase capacity by 60%. As pandemic restrictions are lifted, the travel industry is seeing higher prices, but slowing economic growth and high interest rates pose risks for hotels and airlines. The length of office leases in the UK has reached a record low, while vacancy rates have surged as remote work reshapes the market.
Science Highlights: UK officials hope to rejoin the EU’s Horizon research programme this month after being excluded since 2020 due to post-Brexit disputes. Toyota’s “solid-state” battery is gaining attention as a potential solution for the electric car industry. A new space-based lightning detector can predict severe storms from its geostationary orbit, offering better storm warnings. Blue Origin, owned by Jeff Bezos, is seeking a location for an international launch facility and new partnerships to expand its space services. The health effects of artificial sweeteners, such as aspartame, remain uncertain, causing confusion among consumers.
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Good News: US regulators have approved lecanemab, the first Alzheimer’s drug to slow the progression of the disease. This approval comes after Swedish start-up BioArctic reignited the search for new therapies when Big Pharma had almost given up.
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