1. US job openings decline
Job openings in the United States fell to a 3.5-year low in July, which suggests the labour market is losing steam.
The number of unfilled jobs, shown in the Job Openings and Labor Turnover Survey (JOLTS), fell to its lowest since May 2021. It meant there were 1.07 open positions for every unemployed person in July.
Investors and policymakers are watching the labour market closely, after four monthly increases in the unemployment rate stoked fears of a recession.
“The labour market is still in pretty good shape, but it has cooled dramatically over the last year and a half,” Bill Adams, chief economist at Comerica Bank, told Reuters. “Most Americans who want jobs have them, but there are fewer opportunities or alternatives for workers who are laid off or simply prefer something different.”
The latest weekly data from the labour department, released on 5 September, also supports the view that the jobs market is relatively stable. The number of Americans completing new applications for jobless benefits declined last week, with layoffs remaining low.
2. Olympics boost for Eurozone business
Business activity in the Eurozone received a boost following Paris’s hosting of the Olympic Games in August. However, this is likely to be a short-lived impact, Reuters warns.
A Purchasing Managers’ Index (PMI) by Hamburg Commercial Bank (HCOB) jumped to 51.0 from 50.2 in July. The 50 mark separates growth from contraction and this represents the sixth consecutive month in which the Eurozone has beaten that mark.
“An Olympics-driven rise in the Eurozone’s composite PMI in August masks the underlying picture that the bloc’s current growth momentum is weak,” Rory Fennessy, of Oxford Economics, told Reuters. “This adds further fuel to the fire for the ECB to cut rates on 12 September.”
More than 80% of economists polled by Reuters expect the European Central Bank to cut rates twice more this month.
3. News in brief: Stories on the economy from around the world
South Africa’s current-account deficit narrowed in the second quarter, shrinking to an annualized 0.9% of gross domestic product. However, the annualized trade surplus expanded from 165.8 billion rand in the first quarter to 187.4 billion.
The Swedish government has said it will cut income taxes in 2025 in an effort to mitigate the impact of household purchasing power being eroded by rising prices and borrowing costs.
In its draft budget proposal, the Brazilian government has forecast economic growth of 2.6% and inflation of 3.3% next year.
Annual inflation was 2.12% in Indonesia in August, within the country’s central bank target for inflation of 1.5% to 3.5%.
Kenya’s private-sector activity picked up in August, with firms starting to recover from the impact of anti-government protests in the previous month.
Consumer inflation in South Korea hit a 3.5-year low in August, slowing to 2% on the year before, compared to 2.6% in July.
4. More on finance and the economy from our blog
According to the World Bank, 108 countries are currently stuck in the ‘middle-income trap‘. Read our piece to learn more about the trap – and how countries can overcome it.
A new World Economic Forum report, in collaboration with McKinsey & Company, explores global venture-capital funding to fintech. It identifies gaps in fintech funding and explores strategies to close these gaps and boost innovation.
Ray Dalio, founder of Bridgewater Associates, spoke to the World Economic Forum, giving his view on the global economy. He identified 5 trends shaping global affairs.