The Department of Labor reported a surprising uptick in unemployment claims on Thursday, with 315,000 new claims for the week ending September 6th. That was above the prior week’s reading of 304,000 and above expectations of 300,000. With this increase, the 4-week moving average has risen to 304,000, slightly above the low for 2014 at levels seen at the end of 2007.
In the second quarter of this year, Canada’s economy experienced a highly appreciated boost as households began spending more, to an annualized pace of 3.1%. This is the largest quarterly gain that Canada has experienced since 2011, in the third quarter. The increase in GDP, gross domestic product, was far larger than the rate of 2.7%, which is what economists were expecting. Following a slow start, which is estimated to be the economy’s worst performance in over a year, the country will benefit from the unexpected jump.
The creation of the BRICS New Development Bank (NDB) to finance infrastructure and sustainable development projects in emerging economies is a landmark achievement. Developing nations have lost faith in the current system with its strict conditions on development finance and its inability to insulate countries from financial shocks. International observers have however expressed mixed views about the creation of the bank and what it represents for the nascent multilateral BRICS bloc of Brazil, Russia, India, China and South Africa.
The Federal Reserve announced a proposed change to its forward guidance that could cause bond rates to rise in the United States sooner than expected.
Boston Federal Reserve President Eric Rosengren said that the Federal Reserve may choose to cease forward guidance on monetary policy for market participants, which would allow the central bank to raise the Federal Funds Rate from its historic low of 0.25%. That rate has remained unchanged since it was lowered after the global financial crisis in 2008-2009.
As France continues to stagnate economically because of socialism and high taxes, and Italy falls back into an increasingly worrying recession, the international community is often looking to Germany as a savior for the Euro. With Portugal and Greece struggling to stay on their feet, it’s common to hear economists preaching about how the south of Europe could learn a lot on public debt and governance from their German neighbors.
Since the onset of the North Atlantic financial crisis (NAFC) in 2008, central banks in the US and the other major advanced economies have pursued highly accommodative monetary policy, including through unconventional policy actions. Policy rates have been near zero in these economies for almost five years, and both short-term and long-term interest rates have touched historic lows.
Globally equities have fallen amidst fears that European quantitative easing will not be enough to counteract rising interest rates for U.S. Treasuries and falling money supply growth in China.
The Yes vote has taken a narrow lead, but the vote is too close to call ahead of September 18’s vote on Scottish independence. Increasingly, however, many Scots are saying ‘what have we got to lose by separating from a London-centric United Kingdom?’
Foreign investment generated in Zimbabwe has fallen by more than fifty percent over the first six months of this year, according to the chief of the country’s central bank, John Mangudya. In comparison to the $165 million figure that was received throughout the same period in 2013, Zimbabwe only managed to gain $67m in investment this year. The policy considered by the government to return economic control to black Zimbabweans has been met by a degree of misunderstanding by foreign investors, according to Mangudya.
The Federal Reserve said that the U.S. economy did not see a significant change in its rate of growth in August, as the twelve regional Federal Reserve Districts all reported business ongoing but steady optimism about the rate of economic growth in their regions. The comments came in the Federal Reserve’s Beige Book report, released this Wednesday.
