- This weekly round-up brings you the latest stories from the world of economics and finance.
- Top economy stories: US job growth slows but unemployment falls; Sovereign debt ratings at risk from high carbon emissions; Inflation continues to fall around the world.
1. US job growth slows but wages continue to increase
Fewer jobs were added to the US economy in July than expected, with nonfarm payrolls increasing by 187,000.
A rise of 200,000 had been predicted by economists surveyed by Reuters following average monthly growth of 218,000 in the past three months. The economy needs to create around 100,000 jobs a month to match increases in the working-age population.
The US unemployment rate fell last month, however, dropping to 3.5% from 3.6%, putting it back at levels last seen more than half a century ago.
Wages also increased in July, with average hourly earnings climbing 0.4% – the same figure as in June. The year-on-year increase in earnings was 4.4% for July, meaning salaries are now rising faster than inflation.
2. Sovereign debt ratings at risk from high carbon emissions
Failures to cut carbon emissions will cause debt-servicing costs to increase over the next decade, according to a new study that examines the impact of the climate crisis on sovereign credit ratings.
“Our results support the idea that deferring green investments will increase costs of borrowing for nations, which will translate into higher costs of corporate debt,” researcher Patrycja Klusak said of the study led by the University of East Anglia and University of Cambridge.
Countries including China, India, the United States and Canada could see their credit scores fall, which would lead to rises in the cost of servicing their debt.
Overall, 59 nations could be downgraded under a scenario where emissions keep rising, the study says.
3. News in brief: Stories on the economy from around the world
UK house prices fell in July for the fourth month in a row, according to a leading mortgage lender. Prices dropped 0.3% on the month and 2.4% on the year.
Hiring of new staff in the UK has slowed to its lowest rate in three years, according to a new survey from the Recruitment and Employment Confederation and accountants KPMG. Wage growth has also hit its lowest rate since April 2021.
Industrial production in Germany fell in June, dropping 1.5% from May. Weak demand from China, worker shortages, monetary policy and the impact of last year’s energy crisis are all factors, Bloomberg reports.
It comes as German inflation fell in July. Consumer prices rose 6.5% year-on-year, following a 6.8% increase in June.
Indonesia’s GDP rose 5.17% in the second quarter compared to the same period last year, new data shows. Compared to the first quarter of 2023, the economy grew 3.86%.
The productivity of people working from home is lower than that of those working in the office, new research published by the US National Bureau of Economic Research has found.
Hungarian inflation has fallen to its lowest in nearly a year, reports Bloomberg. Consumer prices rose 17.6% year-on-year in July, the lowest monthly figure since August 2022. Prices had risen 20.1% in June of this year.
A new World Bank report suggests that public debt is set to fall in most Pacific countries in the next 12 months.
Mexico’s annual inflation rate slowed for its sixth consecutive month in July, falling to 4.79%, new data shows.
China’s consumer price index fell by 0.3% year-on-year in July, tipping the country into deflation, the country’s National Bureau of Statistics has reported.
US consumer prices rose 0.2% in July and 3.2% year-on-year. It means consumer price increases have dropped from a peak of 9.1% in June 2022.
Singapore has downgraded its growth forecast for 2023, after GDP grew by a seasonally adjusted 0.1% in April-June compared with the previous quarter.
The UK also posted a small GDP growth figure for the second quarter of 2023, at 0.2%.
4. More on finance and the economy on Agenda
The UK has introduced a new law that gives employees the right to request flexible working patterns. Find out more about the new law and how it compares to flexible working laws around the world.
What is skill inflation? Learn more about the risks it poses – and how to overcome them – in this explainer.
Want to learn more about sovereign credit ratings? Read this Agenda explainer on what they are, how they’re determined and the role they play.