August PMIs for services and manufacturing show retreat from July’s bouncebackThe eurozone’s recovery from its deepest economic downturn on record hit the brakes in August, as pent-up demand unleashed by the easing of coronavirus lockdowns dwindled, according to a closely watched survey.After many of the initial Covid-19 restrictions were relaxed, activity in the eurozone expanded in July at the fastest pace since mid-2018. But as infection rates have risen again in parts of the region, some earlier curbs have been reinstated. Continue reading...
But ONS finds four in five businesses stating that their risk of closing down is lowOne in eight members of the UK workforce, equating to more than three million people, were under furlough as the government’s wage subsidy scheme began to be phased out, the latest official data shows.The regular update on the economy from the Office for National Statistics found that 12% of workers were furloughed between late July and the middle of August, half the number two months earlier. Among the businesses trading 11% of the workforce was furloughed, rising to 71% for the 4% of firms that had not yet re-opened. Continue reading...
Increase of 135,000 from the previous week’s revised level of claims suggest that layoffs increased last weekThe number of people applying for unemployment benefits climbed back over 1 million last week as the coronavirus continued to take a devastating toll on the job market.The labor department announced on Friday that it received 1.1m claims for benefits last week, an increase of 135,000 from the previous week’s revised level and suggesting that layoffs increased last week. Continue reading...
There are millions unemployed, but plenty of work to do. How about a Pandemic Jobs Program that pulls in elements of the Green New Deal?In America, it seems, workers always come last. With more than 31 million out-of-work Americans now cut off from enhanced unemployment benefits, and with Washington’s failure to deliver relief, working families and the broader economy are set to fall off a cliff.Related: USPS crisis: postmaster general to suspend all changes until after electionThe federal government must play a bigger role in ensuring workers earn a living wage – especially in this crisisMoira Herbst is a writer based in New York Continue reading...
by Larry Elliott and Kalyeena Makortoff on (#571TX)
Shares in S&P 500 are up 50% on Covid trough in late MarchWall Street’s rapid recovery from its Covid-19 slump has entered a new phase after a leading yardstick of American shares briefly hit a record high.In early trading in New York the S&P 500, which measures the stock market valuation of the 500 leading US quoted companies, rose to 3,394.82, exceeding its previous high by a single point. Continue reading...
Central bank intervention reassured the financial system, but the real world outlook is bleak – just ask M&S workers in the UKIt is business as usual on Wall Street. Forget that the US economy shrank by almost a tenth between April and June. Forget that the official unemployment rate is 11%. The only news that matters is that the stock market has topped pre-crisis levels.That’s not only true in the US. The Financial Times index of global shares is almost back to where it was in the happy days when only a few health experts had heard of Covid-19. There is much talk – almost all of it the product of wishful thinking – about a V-shaped recovery from the pandemic. The one place it is certainly happening is in the world’s bourses.Related: The Tories are trying to stymie the disruption that the economy so badly needs | Christine Berry Continue reading...
Houston’s rental aid fund was empty 90 minutes after it opened. In Chicago, 80,000 renters applied for 2,000 relief grantsIt’s already started. A majority of US states have resumed evictions, or are allowing them despite the worsening pandemic.As many as 40 million people nationwide face eviction due to inability to pay rent. In comparison, the 2008 foreclosure crisis saw the loss of 10m homes. Now, millions – seniors, people with disabilities, parents and children – are at risk of homelessness. Eviction preys disproportionately, in many places overwhelmingly, on Black women and people of color, deepening savage racial inequities.Related: Wave of evictions sweeps US amid impasse over coronavirus protectionsRent relief funds alone cannot resolve the renter crisis aggravated by the pandemicLupe Arreola is executive director of Tenants Together in California, a statewide coalition of tenant organizations and an anchor organization of the national Homes for All campaign and the Right to the City Alliance. Amee Chew, PhD, is a Mellon-ACLS public fellow who works in housing policy. Together, they have collaborated with national housing justice organizations on OurHomesOurHealth.org Continue reading...
Economic disruption can be harnessed for good, like tackling climate change: but right now we have all pain and no gain“The pandemic is a portal,” wrote Arundhati Roy back in April. It has since become commonplace to argue that coronavirus has created both a need and an opportunity for fundamental change. Though we might like to pretend otherwise, the kind of deep-seated changes we need to confront our ongoing crises would certainly be disruptive. Retiring dirty industries and growing clean ones is disruptive. Shifting from an economy that bids up land values to one that does socially useful things is disruptive. Redressing the imbalance between London and the rest of the country is disruptive.The pandemic means that much of this disruption is now happening anyway. We are enduring the pain – so couldn’t this be an opportunity to gain?Does the fall in commercial property values provide a chance to bring land back into public or community ownership?Related: Britain doesn't have a government, it has a permanent campaigning machine | Alan Finlayson Continue reading...
Jubilee Debt Campaign reveals sharp rise in number of countries in distress since 2018Developing nation debt has more than doubled in the past decade and left more than 50 countries facing a repayment crisis, according to a campaign group.Data from the Jubilee Debt Campaign shows that even without taking full account of the impact of the coronavirus pandemic, there has been a sharp jump in the number of poor countries in debt distress since 2018.Country-by-country annual external government debt payments, as a percentage of government revenue.The extent to which a whole country (public and private sector) was a net financial creditor or debtor to the rest of the world.The size of a country’s private external debt.How much a country was paying to and earning from the rest of the world each year (its current account balance).IMF debt risk ratings. Continue reading...
US billionaires’ wealth is soaring while millions remain unemployed, creating a country with two economies and increased inequalityIt’s only a hundred miles from Manhattan to East Hampton but as the city swelters the Long Island town can seem a world away. Cool Atlantic breezes take the heat off long summer days spent on its miles of white, soft sand beaches. High-priced farm stands provide heirloom tomatoes, peaches and arugula to summer visitors and the mansions of the financial titans and the celebrities, including Beyoncé and Jay-Z, Julianne Moore and Robert Downey Jr, who summer there.Nor does the coronavirus pandemic seem to have dampened the 1%’s enthusiasm for the Hamptons.Related: Why the Covid-19 financial crisis will leave lasting scars on Gen ZI feel left behind. Some of my dreams are now halted Continue reading...
Short-term analysis of ways to save society, and indeed humanity, is uselessIn a biology lesson about the bacterial growth curve, the parallels with the climate crisis were hard to miss. Stick bacteria in a test tube with food and their population will grow exponentially until, eventually, they run out of resources and kill themselves off. Even a couple of decades ago, the comparison with humanity’s predicament felt glaringly obvious; and we have not really strayed since from the inevitable path to extinction.The hope seems to be that a big crisis might be the shock we need to change course. But we are living through the biggest global crisis for decades – and are travelling and consuming less as a result of the pandemic – yet it already seems unlikely that much will change. It’s easy enough to throw around the old adage “never waste a good crisis”. But when it comes to existential questions about the future of humanity, it has proved fairly useless.For a while after the 2008 crash, it looked as if things might change – economists designed global ‘happiness’ indicesRelated: Wellbeing should replace growth as 'main aim of UK spending' Continue reading...
The furlough scheme and ‘eat out to help out’ have seen his popularity soar. But few ministers survive a recession unscathedWhen Sajid Javid was thrown out of No 11 in February 2020, few outside Westminster had even heard of his successor. Rishi Sunak had been an MP for less than five years, a minister for two, and had just a few months of experience in the cabinet in the relatively junior role of chief secretary to the Treasury.Nor was Sunak helped by the manner of Javid’s departure – he resigned after Boris Johnson told him to sack all his advisers, a move Javid later said “no self-respecting minister would accept”. Sunak, in acquiescing to the decision, was portrayed as a young loyalist unlikely to ruffle any feathers.Related: End of UK furlough scheme ‘means needless loss of 2 million jobs’How people go to work, where they live and many other aspects of their lives are going to change, creating new industries and shrinking others Continue reading...
Threadneedle Street’s forecasting has been faulty. But it must still play its central role in protecting jobs and the economyThe UK is performing better than expected. That was the message from the Bank of England’s governor, Andrew Bailey, following its latest review of the economy.It was a message he almost muttered under his breath, as if knowing that almost anyone listening would yell back: “Oh no it isn’t!”The number of people visiting high streets and shopping centres, which dropped by 80% in the first weeks of the lockdown, was still down by a third last week Continue reading...
by Richard Partington Economics correspondent on (#56WBR)
Experts say government must not risk pitting the economy against public healthThe lifting of coronavirus restrictions by the government could risk pitting the economy against public health, triggering a higher death toll and double-dip recession, two of the country’s top economists have warned.In a warning to ministers, Nicholas Stern, the leading climate economist and former Treasury mandarin, and Sir Tim Besley, a former rate-setter at the Bank of England, said an abrupt and premature easing of lockdown would be counterproductive in the fight to save jobs and reboot Britain’s economy from the coronavirus recession.Workplace rotation schemes to limit physical interaction and the spread of the disease.Subsidies for workplace testing to control outbreaks, particularly in key industries as well as sectors with more human contact.Boosting sick pay to remove a disincentive for self-isolation.Drawing up a recovery plan that capitalises on net-zero carbon commitments, boosting job creation in green industries. Continue reading...
Figures show 963,000 people filed for claims last week as pandemic’s devastating impact maintains grip on economyThe number of Americans who filed new claims for unemployment benefits last week dipped below 1 million for the first time in 21 weeks, but signs of the coronavirus pandemic’s devastating impact on the US jobs market remain.The latest figures from the labor department showed 963,000 people filing claims after 20 weeks of claims above 1m. Claims still remain historically high. Before the pandemic, claims were averaging about 200,000 a week and the previous record for claims was 695,000, set in 1982. Continue reading...
Industry says UK is prioritising post-Brexit trade talks with Washington rather than fight 25% tariffsThe Scotch whisky industry has attacked the UK government for its “inexplicably slow” action against hefty tariffs imposed on whisky imports by the US government.In an unusually critical statement, the Scotch Whisky Association accused UK ministers of prioritising post-Brexit trade talks with the US rather than fight against the 25% tariffs imposed on Scotch whisky and other goods by the US last October, in a dispute over European subsidies for the planemaker Airbus. Continue reading...
Too much is being read into the greenback’s recent weakening against the euroThe dollar is in freefall! The global greenback is doomed! screamed recent headlines. Actually, such sensational headlines are “too sensational”, to echo that noted authority on currencies, Miss Prism, in Oscar Wilde’s The Importance of Being Earnest.The dollar’s fall in July to a two-year low against the euro was the immediate impetus for these stories. In fact, the dollar’s recent slide is one in a series of readily explicable fluctuations. When the Covid-19 pandemic went global in March, the dollar strengthened on the back of safe-haven flows into US Treasuries, as it does at the start of every crisis. By May, the Federal Reserve, acting as global lender of last resort, had accommodated this mad scramble for dollars by pouring buckets of liquidity into financial markets and the greenback gave back its early gains.When seeking to understand events, we shouldn’t make the perfect the enemy of the goodRelated: What the weakening dollar means for the global economy Continue reading...
by Presented by Mythili Rao with Aditya Chakrabortty; on (#56VEC)
Economics writer Aditya Chakrabortty describes how the coronavirus crisis has sent Britain plunging into a record recession and what it means for the millions of people fearing for their jobsBritain is officially in its deepest recession since records began following the unprecedented economic shutdown in response to the coronavirus crisis. It has left millions of people fearing for their futures and especially their employment. In the past six months, the UK has shed nearly 750,000 jobs.Economics columnist Aditya Chakrabortty tells Mythili Rao that the chancellor’s initial response of the government-backed furlough scheme was pivotal. But as Rishi Sunak looks to wind down the scheme by October it risks pitching people out of work just as the economy is beginning its recovery. Continue reading...
High numbers of workers furloughed in both towns but tourists drive Lakes boom, while airline-dependent centre strugglesIf there was a corner of the UK that felt the sharp impact of recession first, it was the tourist honeypot of Windermere. Visitors disappeared overnight, just as shops and bars were readying for the booming spring and summer months.Nearly 19,000 workers in the area were furloughed – 40% of the eligible workforce – earning South Lakeland the unwanted title of “furlough capital of the UK”. The neighbouring area of Eden had the country’s second highest furlough rate, with 39% of the workforce placed on the government scheme that covers 80% of a temporarily laid off employee’s wages. Continue reading...
'I’ve said before that hard times were ahead and today’s figures confirm that hard times are here,' says the chancellor.Britain has entered the deepest recession since records began, as official figures on Wednesday showed the economy shrank by more than in any other G7 nation during the coronavirus outbreak in the three months to June.The Office for National Statistics said gross domestic product (GDP) fell in the second quarter by 20.4% compared with the previous three months – the biggest quarterly decline since comparable records began in 1955