Economy

USA: Labor market develops robustly, but urgent need for action for the new president

In the USA, the hanging game for the presidential election continues. Meanwhile, the Bureau of Labor Statistics reports that the recovery in the US labor market continued at a surprisingly dynamic pace in October. Nevertheless, combating unemployment remains an important challenge for the new president. Above all, the new administration must ensure that the pandemic does not get completely out of control so that new nationwide lockdown measures can be avoided. On the other hand, the households affected by unemployment need new state support as soon as possible. The unemployment rate in particular has made a remarkable downward turn in October – it fell from 7.9 percent in September to 6.9 percent in October. Many Americans have obviously found a job again, which is gratifying. But there are still more than 11 million people without a job and the number of long-term unemployed has again risen significantly (duration of unemployment…

Partial lockdown puts economy under pressure

On Wednesday, under the impression of the rapidly increasing number of new corona infections, the Federal Government and Minister Presidents decided to impose a „partial lockdown“ from November 2. Restaurants and several service industries will have to close again for another four weeks, but this time stores will be allowed to remain open – subject to conditions. Schools and daycare centers will also remain open. For many businesses in the catering industry, this is of course the „worst case scenario“, even if generous compensation payments have been promised. Hard weeks are also dawning for the retail trade. Although there is hope that the Christmas business will not be completely lost. But the difficult circumstances are likely to deter many customers from their usual shopping spree and shift even more sales to online retailers. The desired effect of the reduction in VAT will therefore only benefit the stationary retail sector to…

Record growth of the EMU economy in the third quarter, but the winter is coming!

After the cross-border lockdown due to the corona crisis in spring sent the euro zone economy into a tailspin, the summer months saw a rapid upturn. Driven by catch-up effects, EMU gross domestic product grew by 12.7 percent quarter-on-quarter between July and September. In the second quarter, the record minus was still -11.8 percent. The picture is similar in all major countries in the euro zone: in Germany, growth compared with the previous quarter was 8.2 percent, in Italy 16.1 percent, in Spain 16.7 percent and in France as much as 18.2 percent. Previously there had been historic declines in each of these countries. As impressive and pleasing as these reports are, they are already history, as new adversity is looming again in the final quarter. Winter is coming, and with it the number of infections is rising. New precautionary measures lead to (partial) lockdowns in several countries. Although the…

World Savings Day 2020: Money investment backlog intensifies

The savings of private households in Germany have risen sharply in the last six years. Most recently, the savings ratio has once again shot up as a result of the Corona crisis. However, extremely low interest rates in combination with the traditional risk aversion of German private investors and rampant regulation of investment advice make it difficult to make a balanced investment. In addition, high real estate prices and restrictive building regulations are making it increasingly difficult to acquire real estate as an alternative to investing money. As a result, a growing investment backlog has built up and the proportion of uninvested funds in the form of demand deposits and cash is continuing to grow. The fact that, despite the corona crisis, private households did not engage in panic selling of securities in the first two quarters of the current year, and instead invested more funds in the form of…

China is gradually regaining its old growth strength

After the deep corona crash at the beginning of the year, the Chinese economy continued its strong recovery over the summer months. Annual economic growth accelerated from 3.2 to 4.9 percent in the third quarter and is thus not far off its previous growth path. By the second quarter, China had already restored its pre-crisis level of economic output. For the year as a whole, there are now signs of growth of around two percent compared with 2019. This makes China one of the very few countries that will even achieve a positive growth rate this year compared to the previous year, and once again proves to be the global economic locomotive. One positive aspect is that the momentum of the recovery has continued until the very end. Both industrial production and the retail trade were able to accelerate their growth significantly in September. The economic climate has recently brightened…

Youth unemployment is becoming a problem in the euro zone

The corona virus caused severe economic setbacks in economies around the world in the first half of the year. In the euro zone, extensive measures were at least able to protect the labor market from more serious distortions. But things are by no means going equally well for all age groups. Particularly in the group of under 25-year-olds, a fairly rapid increase in the EMU unemployment rate has been recorded since the lockdown measures starting in March. One of the reasons for the rapid deterioration in youth unemployment is the fact that companies in Corona times provide significantly fewer training places due to increased uncertainty. This poses a particular challenge to all those who left school after graduating in Corona summer and find it difficult or impossible to find an apprenticeship. In addition, fixed-term employment contracts are hardly ever extended in these uncertain times. The danger here is that these…

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