The Federal Reserve dominated economic news this week, as the central bank prepared America for higher borrowing costs. Citing economic strength despite just 0.5% GDP growth in the first quarter of 2016, the Federal Reserve reiterated its view that June would be an appropriate month to increase its Federal funds rate target. This rate influences the interest rates on many forms of debt, from U.S. Treasuries to mortgages.
This is an abridged version of this article. For the full article please see here.
I was in Belgium in 2011-2012, when I witnessed the escalating ferocity with which the sovereign debt crisis undermined confidence and economic activity across the Eurozone. Four years later, in 2016, economic recovery from the crisis continues to remain fragile – with highly lackluster or tepid growth having become endemic in the Eurozone.
More houses are being built in America, and Americans are buying more products online, which is helping inflation rise. New housing starts jumped 6.6% from the prior month to 1.17 million in April, according to a new report by the Census Bureau. Single-family building permits saw a 1.5% rise from March, and are continuing to drive the increase in housing in America.
Self-congratulatory rhetoric keeps springing from the lips of World Economic Forum elites – at the expense of reality. Software executive Brett Parker claims “Africa will probably remain natural resources-driven for the next two decades at least.” African Leadership University’s Fred Swaniker
Prime Minister Narendra Modi’s promise of ‘good days’ that underpinned his 2013 election campaign is premised on moving India away from its dole-and-entitlement development model to one that empowers youth by generating large-scale employment. In that context, recently released employment figures from the country’s Labour Bureau are alarming.
Mixed economic data persists, but that isn’t stopping the Federal Reserve from raising interest rates. In an attempt to make borrowing more expensive for consumers, the Federal Reserve may increase its Federal rate target in June.
While markets have been pricing a very low probability of a June rate hike, the Federal Reserve has gone on the offensive, with officials giving several interviews with the press hinting that June will see a rate hike.
There is a recurring question on the nature of China’s economy — is it mostly planned or mostly market? This question has become more concrete this year as China’s partners are scheduled to decide on whether or not to grant China ‘market economy status’. If adopted, this would limit WTO-compatible trade remedies.
The population of Japan peaked in 2008 at 128 million. With the fertility rate — or births per woman — falling below 1.5 at the beginning of the 1990s and falling as low as 1.29 in 2004, the population is shrinking rapidly. Already Japan has one million people fewer than in 2008. The government aims to keep the population above 100 million by 2060.
The Jat reservation agitation has caused considerable social and economic trauma in India, especially in the national capital region around New Delhi. The agitation began as a series of protests in Haryana in February 2016 by the Jat people who were seeking to be included in the list of so-called Backward Classes, which would entitle them to certain affirmative action policies.
Retail sales in America posted a surprising jump, as consumers are feeling more comfortable about opening their wallets. Retail sales rose 1.4% on a month-over-month basis in April after falling 0.3% in March on a seasonally adjusted basis. Sales also rose 2.7% on a year-over-year basis, with non-store retailers seeing a 10.2% gain on a year-over-year basis.
That jump helped to boost overall retail sales from February to April, which saw a 2.8% year-over-year gain.
