Economy

US economic growth is expected to have accelerated in the second quarter thanks to a rise in consumer spending, despite possible headwinds from supply chain disruptions and a resurgence in Covid-19 cases. Data from the US commerce department is expected to show gross domestic product advanced 8.5 per cent on an annualised basis in the second quarter, according to economists polled by Refinitiv.That would put GDP back above its pre-pandemic level for the first time since Covid-19 struck, and mark the fastest growth since 1983, excluding a 33.4 per cent jump in the third quarter last year when the economy emerged from an initial wave of pandemic-related lockdowns. GDP growth is expected to reach 2.1 per cent compared with the previous quarter, based on the measure used by other big economies. The report is scheduled for release at 8:30am Eastern time on Thursday. A surge in vaccinations from April to June boosted the US economy and unleashed pent-up demand that was further aided by large fiscal and monetary stimulus measures. “Consumers are in the driver’s seat in terms of economic activity,” said Gregory Daco, an economist at Oxford Economics. While growth is expected to have peaked, the US economy is still projected to expand at a moderate clip in the second half of the year. Labour shortages, supply chain disruptions and inflation have all been flagged as factors that could weigh on economic activity, along with a resurgence of Covid-19 in some parts of the country. Biden administration officials have expressed concerns over the highly transmissible Delta variant and its effect on the economy. The Federal Reserve on Wednesday said “the path of the economy continues to depend on the course of the virus”.And in recent weeks, federal and local officials have redoubled efforts to boost vaccination rates among those hesitant to get the shot.

The Centers for Disease Control and Prevention backpedalled on its mask guidance for vaccinated people this week, and a number of state and city governments, along with employers such as Google, have begun to mandate vaccinations or weekly testing for employees returning to in-person work. “The most vulnerable part of the economy from another Covid wave is services, in particular leisure activities,” said Stephen Juneau and Anna Zhou, economists at Bank of America, in a note. They cautioned that if pandemic restrictions return and spending on services dips, a boom in spending on goods is unlikely to offset that decline as stimulus payments fade. More

The Liquidity Facility in Euros (LiFE) – which started in March 2019 when there were concerns that Britain’s departure from the European Union might be disorderly – will hold its last scheduled operation on Sept. 29 and close on Oct. 1.”The Bank of England, in co-ordination with the European Central Bank, stands ready to re-adjust the provision of euro liquidity, including restarting LiFE, as warranted by market conditions,” the BoE said in a statement. More

FRANKFURT (Reuters) – The European Central Bank’s new strategy may force the bank to temporarily overshoot its 2% inflation target, the bank said in the accounts of the meeting, which approved the conclusion of the first policy review in 18 years. The accounts mostly contain information already released to the public and does not include any description of the debate between policymakers at the July 8 meeting, a usual element for this sort of ECB documents. More

Investing.com — U.S. 2Q GDP is due, along with weekly jobless claims. Chinese markets bounce after regulators try to calm investor nerves. Didi surges on a report that its backers may take it private again. Amazon (NASDAQ:AMZN) reports earnings after the bell, while Facebook (NASDAQ:FB) and Paypal struggle to meet sky-high expectations. And Robinhood’s IPO is at risk of falling flat – but not as flat as battery maker Clarios. Here’s what you need to know in financial markets on Thursday, 29th July.1 China markets rebound after regulators extend olive branchChinese equity markets bounced sharply after the Chinese Securities Regulatory Commission held a call with big local and foreign banks and investors to reassure them that the actions taken against online education companies were an isolated incident, and had no broader significance for the market.Reports cited unnamed people familiar with the call as saying that the CSRC said it remained committed to allowing Chinese companies access to foreign capital markets, but declined to say what changes, if any, it is planning to the regulation of companies that list in the U.S. through the ‘variable interest entity’ structure favored by many.China’s tech stocks have been battered by a wave of regulatory actions in recent weeks. Didi Global, the ride-hailing giant, rebounded over 30% in premarket trading after The Wall Street Journal reported that its backers may take it private again in order to appease regulators who had advised against its U.S. listing.2. Jobless claims and 2Q GDPThe U.S. will publish its first estimate of second-quarter Gross Domestic Product at 8:30 AM ET (1230 GMT). Growth is expected to have accelerated to an annualized rate of 8.5% from 6.4% in the first quarter, reflecting the reopening of the country’s service sector as the Covid-19 pandemic receded.The numbers come a day after Federal Reserve Chairman Jerome Powell indicated that the central bank won’t be rushed into running down its bond purchases (currently running at $120 billion a month) by a couple of quarters of above-trend growth and inflation. The dollar fell to a two-week low on Wednesday as the market pared back expectations of an early policy tightening.Also at 8:30 AM ET will be the latest weekly jobless claims numbers. Initial claims are expected to have fallen back to 380,000, from 419,000 a week earlier. Recent claims data have hinted at a slight slowdown in the labor market although they remain hard to interpret due to the pandemic disrupting the usual process of seasonal adjustment.3. Facebook warns and Paypal struggles, but stocks set to grind higherEarnings season continues at full throttle, with Facebook falling nearly 4% in premarket after warning of a possible slowdown in advertising revenue due to changes in Apple’s latest iOS operating software that make user behavior harder to track.PayPal (NASDAQ:PYPL), another big pandemic winner that also reported late Wednesday, was down some 4.7% after reporting a sharp slowdown in net new users.  NASDAQ Futures underperformed in the overnight session, trading flat while Dow Jones futures rose 153 points, or 0.4%, and S&P 500 futures rose 0.2%.Amazon tops the bill of companies reporting Thursday, albeit after the close. Early updates are due from Merck, Altria (NYSE:MO), Southern, Hershey, Hilton Worldwide and ICE (NYSE:ICE), among others.4. Robinhood prices IPO at bottom of range; Clarios postponesBrokerage Robinhood  (NASDAQ:HOOD) priced its initial public offering at the lower end of its marketing range, as investors hesitated to commit to a company that has recent and high-profile run-ins with regulators over its business model.The company’s bankers priced the offering at $38 a share. That still gives it a valuation of around $32 billion, almost triple its reported valuation in a private funding round last year.The shares are due to debut on the Nasdaq market later today.  That’s more than can be said for Brookfield-backed battery maker Clarios International, which was reported by Bloomberg to have postponed its debut indefinitely due to market conditions. Clarios had hoped to raise as much as $1.8 billion5 Oil hits two-week high; buoyant Shell, Total updatesCrude oil prices rose to a two-week high, holding gains after U.S. government data confirmed a solid draw on inventories last week.  Bad-tempered public diplomacy between Iran and the West is also strengthening expectations that Iranian supply will not return to the world market as quickly as had been seen a month ago.The mood was also lifted by strong quarterly updates from Royal Dutch Shell (NYSE:RDSa) and TotalEnergies (NYSE:TTE) overnight, with Shell in particular channeling extra money back to shareholders rather than raise its capital spending. That suggests that Big Oil will be happy to enjoy the current windfall rather than work hard to increase output in the coming months.By 6:30 AM ET (1030 GMT), U.S. crude futures were up 0.5% at $72.75 a barrel, while Brent futures were up 0.2% at $74.12 a barrel. More

OTTAWA (Reuters) – A shortage of skilled workers is intensifying in Canada, potentially threatening the pace of the economic recovery from the COVID-19 pandemic, and that has policymakers looking at a largely untapped market for new construction workers: Women.But attracting and retaining women in the skilled trades has long proven difficult, with tradeswomen and advocates citing challenges balancing childcare and on-site work, the stubborn sexism still ingrained in some workplaces, and a lack of opportunities for women to get a foot in the door.Vanessa Miller was a young single mom when she decided to scrap university for welding. She got her journeyperson ticket and became a rarity in Canada: a woman with her own welding rig, a truck kitted out with all the equipment needed to do big jobs.”Every time you go to a different job and nobody knows who you are, you have to prove yourself,” she said, speaking from her home in Regina, Saskatchewan. “It’s still difficult to break into the industry, it’s still very male dominated.”Canada, like other developed nations, is facing a shortage of skilled trade workers just as a pandemic stimulus-backed building boom gets underway. At the same, more women than men remain unemployed because of the pandemic, and about 54,000 women have left the labor force since February 2020. The gap between women’s labor force participation and men’s costs the Canadian economy C$100 billion ($79.3 billion) each year, said Carrie Freestone, an economist at RBC.”Obviously skilled trades are a good opportunity,” Freestone said.In its latest budget, Canada’s Liberal government pledged C$470 million ($373.2 million) to support the hiring of new apprentices for the most in-demand trades. Companies that hire women, Indigenous people and other minority groups get double the funding.But women working in the trades and union leaders say it will take more than just money to get more women in the trades.”We’re doing the work to mentor tradeswomen, to build our supply of under-represented groups,” said Lindsay (NYSE:LNN) Amundsen, director of workforce development at Canada’s Building Trades Unions. But she said there should be quotas on major projects to ensure women get hired.Canada has suggested quotas for certain groups – like women and Indigenous people – on major projects that get federal support, but it is up to the provinces to set them, a spokesperson at the infrastructure ministry said.RETENTION WOESMore than a decade ago, the province of Newfoundland and Labrador realized that efforts to get women more interested in the trades were working, but few were sticking with it.The province funded the Office to Advance Women Apprentices (OAWA) to connect tradeswomen with employers and also set hiring quotas for women and other under-represented groups, like Indigenous people, on major projects.By 2017, about 14% of construction tradespeople working in Newfoundland and Labrador were women, far above the national average of 3-4%, though some barriers remain.When journeyperson millwright Cassandra Whalen landed in remote Voisey’s Bay, Labrador for a recent job, she discovered there was no safety equipment in her size on site.”I needed a respirator, I needed gloves and I needed a harness, none of which they had in size small,” she said. “They had to be flown in.”But Whalen loves her work, and says union advocacy has made the industry more inclusive.One of the unions leading the charge is UA Canada, which pays up to 24 weeks salary to pregnant members unable to work due to safety risks. They also pay a top-up for both men and women who take parental leave after a baby is born.”I really think it does help with the retention for sure,” said Alanna Marklund, a national manager at UAC who is also a journeyperson welder.But childcare continues to be an issue for many tradeswomen. Several tradeswomen interviewed by Reuters said they depended on family members or spouses to help care for young children.Maggie Budden, a journeyperson ironworker, ended up taking a job in a bank after her children were born. “Unfortunately with construction you need to travel and I could not do that with my daughters,” she said. She now runs the newest branch of OAWA, in Cape Breton.Daniella Francis was living in Ontario when she started considering the trades, but she couldn’t find any programs for women in her province. She ended up moving her entire family to Alberta and is now an apprentice plumber. “There needs to be more options,” she said, adding however: “I would say, as a woman, don’t be afraid to go into the trades. Things are changing.” ($1 = 1.2594 Canadian dollars) More

Hello from a now almost completely deserted Brussels, and welcome to the last Trade Secrets of the summer (up here in this half of the globe, anyway, let’s not be all northern hemisphericentric about this) before we disappear on our own break, returning on September 6. Today we wrap up what we’ve seen in the trade world so far this year. In summary, it has not been quite as insanely unpredictable as in 2020 — we’d probably have expired from exhaustion if it had — but there have been some very big stories hurtling at us from unexpected angles. There will no doubt be more when we reconvene in the autumn. Politics take precedence as the pandemic threat recedesThe first thing to note is that actual trade and globalisation are doing OK. Ish. Yes, there has been some quite serious whipsawing of supply chains in certain sectors, particularly anything involving semiconductors. But, as we spent a lot of last year saying, it is mainly political tensions that are driving uncertainty in cross-border movements of goods, services and data. The pandemic did not deliver the big permanent shock to global value chains that many had feared. A big container ship (the Ever Given) got stuck in the Suez Canal for a few days and very entertaining it was too — alert FT readers know a lot more about the hydrodynamics of big boats in shallow waterways than we did before — but it was not a serious threat to globalisation beyond the short term.The big project launched right at the end of 2020 was one of the first to come unstuck: the EU’s ill-fated Comprehensive Agreement on Investment (CAI) with China. Whether or not you think it is a good idea on its own merits (we’ve been sceptical from the beginning), the communications around CAI were badly mishandled within the EU, raising hackles in the European parliament. And then Chinese counter-sanctions against EU policymakers and law firms (and, bizarrely, a perfectly respectable think-tank) slung the deal indefinitely into the deep freeze. We think our early verdict holds up: this was an unwise gamble by Brussels (and Berlin) that has damaged the EU’s credibility.The conventional wisdom ahead of the new US administration taking office in January was that Joe Biden’s trade policy would not be madly destructive like Donald Trump’s, and he would look for longer-term collaboration with allies such as the EU on strategic supply chains, but we should not expect a sudden reversal of all the Trump-era policies. Turns out that conventional wisdom was largely right. (It happens sometimes.) Washington love-bombed Brussels with talk of transatlantic harmony, and the US and EU have declared a fudgy armistice on the Airbus-Boeing dispute and promised some kind of deal on Trump’s steel and aluminium tariffs. But setting back the clock to 2016, and pressing on with a positive trade agenda? No. Biden’s focus is very largely domestic.The real breakout story of 2021 was the issue of Covid-19 vaccines, first a big scrap about export bans either actual or de facto and then a battle over intellectual property waivers for medical products at the World Trade Organization. Mooted by India and South Africa late last year, the WTO waiver debate was rumbling along at medium-profile level until the Biden administration in May suddenly declared itself in favour and it became one of the big global stories of the pandemic. Sadly, though we ourselves said a limited waiver might make sense for tactical reasons, the conversation at the WTO has now settled into a ritual confrontation where India and South Africa demand a super-wide loophole they are not going to get, the EU is cast as a pantomime villain for pointing out IP is not the real issue, and the US, in our view, cynically sits back and enjoys the credit for raising the subject while failing to produce a negotiating text itself or breaking the impasse.Speaking of which, the WTO finally got its new, dynamic director-general in the form of Ngozi Okonjo-Iweala, a heavy-hitting veteran of the global governance circuit, who announced her determination to inject some energy into the moribund institution and boldly challenge the member governments to make progress. Has this had any effect? Not so you would notice. A ministerial focused on fisheries subsidies a couple of weeks ago clarified differences without really resolving them, and there is not much optimism about the big biennial gathering of ministers due at the end of the year.Brexit, certainly the Northern Ireland issue, is going about as well as you’d imagine given that the government that signed the deal either genuinely does not understand what it is in it or is pretending not to. In other UK news, Britain appears to be capitulating to Australia in a bilateral trade deal and calling it a victory.And that is where we’ve got to so far in 2021. Lots of climate and carbon emissions action to come in the autumn, plus the long-running issues of US-China rivalry and the global governance of data and tech, and a vast amount more. We will be back before you know it. As the song says, see you in September. Charted watersOne of the hot topics of the year so far has been what to do about the shortage of semiconductor chips, a problem laid bare by the pandemic. Many jurisdictions, including the US and the EU, are looking to address the problem by relying less on exports from Asia, notably Taiwan and China, and spending more on building up domestic capacity. What is worth bearing in mind is that exports of chips have been in decline for a while now — at least in value terms. Data compiled by Coriolis Technologies, an outfit specialising in trade information, show export values have been falling since 2017. “There has been a rapid increase in intraregional trade in Asia-Pacific and south-east Asia regions as supply chains from China were relocated to avoid tariffs. Chains are now closer together geographically, so reliance on exports has dwindled,” said Rebecca Harding, chief executive of Coriolis. “The trade war between the US and China since 2016 . . . is pushing the two countries to become increasingly self-sufficient in semiconductor production.”Given the geopolitical developments of 2021 so far, we only see this trend continuing as plans to reshore production drive down cross-border trade in chips. Claire JonesTrade linksThe Ever Given has finally made it to port! It’s four months since the giant container ship, which weighs nearly 200,000 tonnes, got stuck in the Suez Canal, blocking shipping from around the world. It docked in Rotterdam today and is expected to sail for Felixstowe on Monday before moving on to Dunkirk in France, where it will be inspected further. (Wall Street Journal $).The House of Lords subcommittee on the Northern Ireland Protocol has published its report assessing the protocol’s impact so far. Meanwhile, it seems supply constraints are one of the factors weighing on the euro area’s recovery.The chip shortage that has disrupted car and electronics production worldwide (and which we refer to above) looks increasingly likely to last into next year, with Apple revealing that it expects the supply troubles to spread to iPhones (Nikkei, $)And finally, exports from south-east Asia have surpassed pre-pandemic levels, thanks to the economic recoveries in the US and China lifting demand for the region’s electronics and automotive components (Nikkei, $). More

BEIJING (Reuters) -China will raise export tariffs for pig iron and ferrochrome, and remove export tax rebates for 23 steel products from Aug. 1, the second adjustment in three months as it seeks to ensure domestic supply while controlling output to curb emissions. Export tariffs for high-purity pig iron will be lifted to 20% from 15%, and for ferrochrome will be increased to 40% from 20%, the Ministry of Finance said in a statement on Thursday.The country will also cancel export tax rebates for 23 steel products, including some cold-rolled coils and silicon steel which have higher added-value compared with carbon steel.”(The changes) aim to promote upgrade and high-quality development of the steel industry,” said the finance ministry. China, the world’s top steel producer had already adjusted its tariffs on May 1, when it removed export tax rebates for 146 steel products, hiked pig iron and ferroalloys export tariffs and exempt some temporary import tariffs.The adjustments came as the country wants to ensure domestic supplies when curtailing production for fewer carbon emissions.However, as steel demand and prices are still well supported by the global economic recovery, the country’s steel products exports picked up 23% in June after a 34% drop in May.Meanwhile, steel output in the first half also jumped 11.8% in China, making it harder to keep to the promise of no rise in annual crude steel production in 2021.”The efforts to control exports are for more production curbs,” said Tang Chuanlin, analyst with CITIC Securities. Tang also noted that the steel supply crunch will remain in the second half of the year. “Even though considering the backflow of exported products, the industry is still facing more than 5% shortages,” he added.Futures prices for the most-traded steel rebar and hot rolled coils on the Shanghai Futures Exchange had jumped 32% and 37%, respectively, so far this year. More