(Bloomberg) — The UK economy contracted last quarter for the first time since early 2021 in what is likely the start of a prolonged recession, while prospects for the euro area also darkened under the weight of inflationary pressures.
In the US, consumer prices rose by less than forecast and suggested the Federal Reserve will be able to tone down its aggressive interest-rate hikes should inflation continue to moderate. China’s Covid-Zero policy and global recession concerns took a toll on the country’s two-way trade.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
Europe
The UK economy shrank in the third quarter for the first time since the final lockdown of the pandemic as the cost-of-living crisis squeezed spending. Gross domestic product fell 0.2%, marking the start of what is expected to be a protracted recession. Britain is the only Group of Seven economy that has yet to fully recover from the pandemic.
The euro zone faces a grim winter as a recession bites just as double-digit inflation grips the region and war rages in Ukraine, according to the European Commission. Out of 15 euro-zone countries on which the Commission provided a quarterly forecast for GDP, every one of them is seen suffering at least one three-month period of contraction.
UK wage growth and hiring activity fell in October as the prospect of a recession prompted fresh caution among employers and cooled the job market.
Nordic inflation developments worsened the risk of the region’s looming recession as consumer price growth in Norway and Denmark hit levels not seen in decades. Norway’s inflation unexpectedly accelerated to 7.5% last month, the fastest pace since 1987, while in Denmark it rose to a 40-year high of 10.1% in September.
US
Inflation cooled in October by more than forecast, offering hope that the fastest price increases in decades are ebbing and giving Fed officials room to slow down their steep interest-rate hikes. Declines in the price gauges for medical care services and used vehicles restrained the core measure. Higher shelter costs contributed to more than half of the increase in overall CPI.
If last year’s holiday shopping season was characterized by empty store shelves and a race to meet demand in a healthy US economy, very different concerns have emerged just 12 months later: overabundance and sinking sales.
Asia
China’s exports and imports both unexpectedly fell for the first time in more than two years, with rising risks of a recession causing overseas consumers to buy less and domestic problems including Covid Zero controls and a housing slump hitting demand at home.
Japan’s household spending increased in September for the first time in three months, showing some recovery despite growing concerns over inflation weighing on households’ spending power. The monthly rise in real consumption offers hope that Japan’s recovery from the pandemic has some resilience, even in the face of accelerating inflation.
Emerging & Frontier Markets
The Philippine economy expanded in the third quarter by more than projected, boosting the case for the central bank to tighten monetary policy further to contain inflation amid a sustained demand recovery.
Ghana’s inflation rate climbed more than expected in October, raising pressure on the central bank to continue increasing borrowing costs that are already at a more than five-year high. Annual inflation quickened to 40.4% in Africa’s second-largest gold producer.
World
Romania’s central bank lifted its benchmark rate by half a percentage point, after three larger increases, to the highest since 2010. Serbia boosted borrowing costs for an eighth month, while Poland left rates unchanged.
The world’s second-biggest buyer of gold among central banks last quarter believes there’s hardly such a thing as too much bullion. Uzbekistan has brought the share of the precious metal in its $32 billion reserves to almost two-thirds, in a reversal of a plan to cut it below 50% by buying US and Chinese sovereign debt.
–With assistance from Philip Aldrick, Siegfrid Alegado, Andrew Atkinson, Ekow Dontoh, Moses Mozart Dzawu, Nariman Gizitdinov, Maria Kolesnikova, John Liu, Ditas Lopez, Reade Pickert, Olivia Rockeman, Craig Stirling, Liza Tetley, Ott Ummelas, Jorge Valero, Erica Yokoyama and Lin Zhu.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
