Key Economic Updates – Remittance Sending Countries

US industrial production fell 0.4% MoM in June

According to data released by the Federal Reserve on 15 July 2009, industrial production in the US dropped 0.4% MoM in June 2009, the slowest pace in eight months, following a revised fall of 1.2 % recorded in the previous month. Analysts anticipated the industrial production to fall 0.6% in June. Capacity utilisation declined to 68.0%, the lowest level on records since 1967, while manufacturing production dropped 0.6% in June. Chief Economist, Manufacturers Alliance/MAPI, Daniel J. Meckstroth said “Manufacturing has taken the brunt of the downturn because the housing collapse, cuts in consumer discretionary spending on goods, and a full-fledged investment retreat was made worse by an major inventory drawdown.”

US private sector sheds 371,000 jobs in July

According to a survey conducted by Automatic Data Processing Inc (ADP), private sector jobs in the US declined 371,000 in July, compared to a revised drop of 463,000 in June. ADP in a statement said, “Despite recent indications that overall economic activity is stabilising, employment, which usually trails overall economic activity, is likely to decline for at least several more months.”

“On the basis of these numbers we reaffirm our forecast that unemployment will peak at around 3.2 million next year.”

David Kern
Chief Economist
British Chambers of Commerce

UK unemployment rises to 7.6%

According to data released by the Office of National Statistics (ONS) on 15 July 2009, UK unemployment rate for the three months to May 2009 was 7.6%, a 0.9 percentage points rise over the three months to February 2009. The number of unemployed during the three months to May 2009 rose by 281,000 to 2.38 million, the highest quarterly increase since records began in 1971. Chief Economist, British Chambers of Commerce, David Kern said “On the basis of these numbers we reaffirm our forecast that unemployment will peak at around 3.2 million next year.”

UK Services PMI Jumps to 53.2 in July

According to data released by the Chartered Institute of Purchasing & Supply (CIPS)/Markit on 5 August 2009, UK's Services PMI index increased to 53.2 in July, compared to a level of 51.6 in June. The UK service sector has reported expansion for the second straight month, after hitting a record low of 40.1 in November. CEO at the Chartered Institute of Purchasing & Supply (CIPS), David Noble said, “The services sector is rebounding at an unprecedented rate after what has arguably been the most savage economic downturn since the end of World War II. After hitting an all time low in November, July saw the sector make marked gains with new business activity rising for the third month running and at the sharpest rate in almost a year- and-a-half. Increasing levels of referrals, more marketing and higher levels of new business have helped.”

Unemployment rate in Canada rises to 11-year high in June

According to jobs report from Statistics Canada on 10 July 2009, unemployment rate in Canada increased to 8.6% in June, the highest since February 1998, compared to a reading of 8.4% recorded in the previous month. However, the country lost 7,400 jobs in June, lower than the job loss of 42,000 recorded in May. Analysts had expected the unemployment rate in Canada to hit 8.7%, and employment to drop by 35,000 in June. Statistics Canada said “While employment remains well below its October 2008 peak, there was a notable shift in the pace of the downward trend in the last three months.”

UAE inflation in 1H 2009 at 3.4% YoY

According to the Ministry of Economy, the consumer price index (CPI) in UAE rose 3.4% YoY to 114.24 in 1H 2009, compared to 110.49 in the 1H 2008. The ministry said “The increase in consumer prices in the H1 of 2009 was a result of a rise of about 2.7% in the prices of food and beverage, 9.7% in educational services and 11.3% in liquor.” However, CPI dropped 0.03% YoY to 113.05 in June 2009, compared to 113.08 in June 2008.

Spanish unemployment rate rises to decade-high 17.9%

According to data released by the National Statistics Institute on 24 July 2009, the unemployment rate in Spain rose to 17.9% in the second quarter, the highest in a decade, as companies cut payrolls to weather the deepest recession. The number of unemployed climbed 126,700 to 4.14 million people from the previous three months.