Economic Highlights

More evidence that we are well past the trough of economic activity. Retail Sales accelerated in June as lockdowns eased, with a jump of 13.5% from May (itself +10.6% from April). Even more impressively, retail sales were higher than they were a year ago (+1.7%), if one strips out the weak Autos and Fuel element. Latest Purchasing Manager survey data tell the same story, with the Services (and, by extension, the Composite) series following Manufacturing into expansion territory (>50), with all the usual caveats about how these indices work in the current circumstances.

Weekly Initial Jobless Claims ticked up for the first time in several months, from 1.3m to 1.42m, confirming that the US economy is hitting a bit of a rough patch as more stringent controls are reintroduced in several states. However, these should be temporary. Continuing Claims, the total number of jobless, actually fell from 17.3m to 16.2m, although this might just be a function over previous over-reporting of unemployment being normalised.

As in the UK, Services and Composite PMI measures in the Euro zone aggregate series moved above 50, cementing the recovery trend. Latest money supply data showed growth in the M3 measure to be 9.2% y/y, testament to the ECB’s continuing attempts to flood the economy with liquidity to keep the financial system working and to spur activity.