Economy.com Daily Update: July 30, 2021

Today's Economy

The core PCE deflator rose 0.4% in June, leaving it up 3.5% on a year-ago basis.

Though wage growth is strong, it's likely it will not set a wage-price spiral into motion.

Strong second quarters in Italy and Spain boosted euro zone growth.

The Fed will likely announce its plans in September.

Commentary

Chile should see a solid recovery this year; Brazil faces a severe water shortage.

The euro zone’s GDP grew more than expected in the second quarter; there was divergence among countries.

We have downwardly revised fourth-quarter GDP due to tourists being unlikely to return until next year.

Australia's central bank will likely reverse its decision to taper bond purchases.

Today's Economic Indicators

Netherlands
Retail Sales
Jun. 2021: 6.6% y/y
Retail sales in the Netherlands were up 6.6% y/y in June, building on a downwardly revised 7.3% gain in May.

Denmark
Unemployment rate
Jun. 2021: 3.8%
Denmark's labor market continues to heal.

France
Household Consumption Survey
Jun. 2021: 0.3% m/m
France’s household consumption of goods increased by just 0.3% m/m in June, underperforming expectations.

Spain
Retail Sales
Jun. 2021: 0.2% m/m
Spain’s retail sales increased by 0.2% m/m in seasonally adjusted terms in June.

Italy
Unemployment
Jun. 2021: 9.7%
Italy’s economy added 166,000 jobs in June, building on May’s growth, while unemployment and inactivity dropped in monthly terms.

Taiwan (China)
GDP
2021Q2: 7.5% y/y
Taiwan's wave of COVID-19 hampered economic growth in the second quarter.

Thailand
Foreign Trade
Jun. 2021: US$3.9 bil
Thailand’s trade position improved in June, as the foreign trade surplus increased to $3.9 billion, up from $3.4 billion in May.

Hong Kong SAR (China)
GDP
2021Q2: 7.5% y/y
Hong Kong's recovery continued into the second quarter, with real GDP expanding by 7.5% y/y, according to advance estimates, following the 8% expansion in the prior quarter.

Euro Zone
Preliminary GDP
2021Q2: 2.0% q/q
The preliminary estimate of second quarter GDP in the euro zone beat expectations, growing by 2% q/q following the first quarter’s 0.3% decline.

Euro Zone
Preliminary Consumer Price Index
Jul. 2021: 2.2% y/y
According to preliminary estimates, headline inflation in the euro zone kicked up again in July to 2.2% y/y after slumping to 1.9% in June.

Euro Zone
Unemployment
Jun. 2021: 7.7%
The euro zone’s unemployment rate decreased to 7.7% in June from an upwardly revised 8% in May.

Brazil
Employment Situation
May. 2021: 14.6%
As anticipated, Brazil’s unemployment reported a mild decrease in May as the economy advanced further.

Canada
Industrial Product and Raw Materials Price Indexes
Jun. 2021: 0.0% m/m
Producer-price inflation took a breather in June.

Canada
Gross Domestic Product by Industry
May. 2021: -0.3% m/m
Monthly GDP data showed that the Canadian economy took another step back in May.

United States
Employment Cost Index
2021Q2: 0.7% q/q
The labor market recovery maintained a strong pace in the second quarter, though the pressure on employment costs cooled slightly despite labor supply issues.

United States
Personal Income
Jun. 2021: 0.1% m/m
Nominal person income inched up 0.1% in June, bucking our expectation of a 0.8% contraction.

United States
PCE Deflator
Jun. 2021: 0.5% m/m
U.S. inflation has accelerated, but the Federal Reserve is still in the camp that it will be transitory; therefore, the monetary policy implications are minimal.

United States
Real Personal Spending
Jun. 2021: 0.5% m/m
Real spending grew at a healthy clip in June, nearly reversing its May decline, as plunging vehicle sales, rising prices, and fading stimulus limited growth.

Chile
Manufacturing Production
Jun. 2021: 14.57% y/y
Chile’s industry reported strong annual growth again in June as the comparison base of last year amplified the rebound.

Chile
Retail & Wholesale Sales
Jun. 2021: 40.3% y/y
Retail sales in Chile pushed to a new high in June after logging a record gain in the prior month.

Chile
Employment
Jun. 2021: 9.5%
Chile's national unemployment rate averaged 9.5% in the April-June rolling quarter, down from 12.2% a year earlier.

World
Moody's Analytics Global Risk of Recession
Jul. 2021:

United States
Moody’s Analytics & CNN Business Back-to-Normal Index
July 28: 91.6
The CNN Business/Moody’s Analytics Back-to-Normal Index declined this week, moving backward from 92 to 91.6.

United States
University of Michigan Consumer Sentiment Survey
Jul. 2021: 81.2
U.S. consumer sentiment fell in July as inflation expectations rose, according to the University of Michigan’s final report.

Belgium
Unemployment
Jun. 2021: 6.2%
Belgium’s seasonally adjusted unemployment rate fell slightly in June to 6.2% from May’s unrevised 6.5% figure.

Colombia
Monetary Policy
Jul. 2021: 1.75%
Colombia’s central bank left the reference interest rate unchanged at 1.75% after July’s regular meeting.

United States
Agricultural Prices
Jun. 2021: 0.9% m/m
The Agricultural Prices Received Index rose to 107.3 in June, which is the highest reading since May 2015.

China
Manufacturing PMI
Jul. 2021: