Europe, Middle East and Africa
Leading economists didn't expect much growth from the German economy in this year's second quarter, but per data from the country's Federal Statistics Office, Germany rode a wave of robust domestic consumption toward 0.5 per cent gross domestic product growth from the first three months of 2018. Year-over-year growth for the period looked even better - a 2.0 per cent spike.
More uneven, but still positive economic news came Aug. 20, with the Deutsche Bundesbank announcing that it projects growth to continue during the third quarter, but at a slower pace than experienced from April to June. The central bank also said EU trade disputes with the U.S., for which Germany serves as a primary channel due to its status as the biggest EU economy, haven't been a major problem for the nation thus far but could be in the future.
Research released by Statistics Netherlands Aug. 14 found that the Dutch economy experienced little significant change between July and August of this year. Fortunately, this is a good thing, as the Netherlands is currently in an excellent economic position. Growth was a modest 0.7 per cent, fueled largely by foreign trade, but consumer spending rose again for the 17th consecutive quarter, as a further indicator of the strong confidence of Netherlands residents.
Only a small decline in Dutch manufacturers' confidence marred the otherwise excellent nationwide economic report. However, Statistics Netherlands pointed out that the index of manufacturing confidence is still much higher now than it has been in the past 20 years.
When Japan's Cabinet Office announced May 15 that the country's economy had experienced a contraction for the first time in about two years during 2018's first quarter, the business world was surprised but expected an almost immediate recovery, as Bloomberg reported at the time. It seems those analysts were right to stay positive, because the second quarter showed renewed GDP growth. Citing government data, The Japan Times stated that GDP expanded 1.9 per cent during the April-June quarter, more than making up for the 0.7 per cent slowdown of the year's first three months. The final number beat economists' estimates, who had expected a 1.4 per cent increase.
If current trends continue, Japan could finally see an end to other monetary issues that have bedeviled its economy despite mostly steady GDP expansion, such as deflation of the yen. According to Reuters, some experts seem to believe this is the case: Former Bank of Japan board member Koji Ishida said the national financial institution's stimulus program could be phased out now, even though inflation still hasn't reached the 2.0 per cent threshold long hoped for by the BOJ.
Despite the general strength of its economy during the past several years, Thailand's national bank has held federal interest rates at 1.5 per cent since 2011. However, Bloomberg reported that this could soon change, on the basis of 4.6 per cent year-over-year economic growth in the second quarter - a robust figure that exceeded economists' expectations - and other positive metrics.
"We need to look at policy space in the future - we need to have more bullets in hand," said Veerathai Santiprabhob, governor of the Bank of Thailand in an Aug. 20 statement to the media. Veerathai noted that the country would be ignoring the direction of most national financial institutions around the world that have increased their interest rates.
The American economy saw somewhat reduced job growth in July, with 157,000 nonfarm jobs added to nonfarm payrolls, according to the Bureau of Labor Statistics' latest Employment Situation Summary. While hardly a small number, it fell well short of estimates that projected 193,000 and 190,000 new jobs from economists polled by Bloomberg and Reuters, respectively. It also pales in comparison to the dramatic employment spike seen just a month earlier, as June's revised job-growth numbers now show 248,000 positions created instead of the initial figure of 213,000. Unlike the total number of new jobs, the U.S. unemployment rate didn't surprise government officials, economists and business leaders at all: It fell slightly to 3.9 per cent in July from last month's 4.0 per cent, in line with the majority of predictions.
Also, the industries responsible for much of the job growth changed little between June and July: Professional and business services added the most jobs for the second consecutive month with 51,000 new positions created, while manufacturing and healthcare once again took the second- and third-place spots, respectively adding 37,000 and 34,000 roles. New growth showed up in the "food services and drinking places" segment, with 26,000 new jobs on its books likely due to seasonal work. The only notable decline was in the sporting goods, hobby, book and music stores section of retail trade, which lost 32,000 jobs.
Federal benchmark interest rates went up during July according to the Federal Reserve's intention, with the next rate hike anticipated for September. Trends such as good-but-not-great wage growth (0.3 per cent in July) and persistent trade tensions might cause the Fed to delay such an increase.
Central America's biggest economy has many changes on its horizon, most notably the transition of power between Mexican President Enrique Peña Nieto and President-elect Andres Manuel Lopez Obrador. The Los Angeles Times reported that the two met Aug. 20 at the National Palace to discuss how the leftist-populist Obrador would move himself and his team into Los Pinos (Mexico's equivalent of the White House) in stable fashion over the next several months. With inauguration scheduled for Dec. 1, the two expressed differences but did so respectfully, a contrast to their charged debates of years past.
Although Obrador is oft-characterized - with negativity by critics, admiration by allies - as a firebrand, his demeanor in this summit was much more reserved. He communicated the same anti-corruption pledges and progressive beliefs that made him wildly popular among many Mexicans, as evidenced by his landslide victory. Obrador also expressed support for renegotiation of the North American Free Trade Agreement in a manner beneficial to all member nations. About a week after the Nieto-Obrador summit, the U.S. and Mexico agreed on several NAFTA revisions, including provisions mandating that auto parts sold in North America be largely manufactured in either country, according to CNN. President Donald Trump, announcing the deal via an Oval Office press conference (with Peña Nieto on a conference call), seemed to suggest this could precede a more substantive deal between the two nations. However, Peña Nieto stated his desire to keep Canada involved in further NAFTA talks, as he has in the past.