The Eurozone is recovering but uncertainty looms large.
Eurozone producer prices accelerated in May, driven by a surge in energy prices, data from the European Union’s statistics office Eurostat showed on Friday. Eurostat said prices at factory gates in the 19 countries sharing the euro rose 1.3% month-on-month for a 9.6% year-on-year increase. Changes in prices at factory gates are usually transmitted to final consumers and therefore herald trends in inflation that the European Central Bank targets with its monetary policy.
The eurozone economy is beginning to rebound from a pandemic-induced slump but the recovery remains fragile, the European Central Bank’s President Christine Lagarde said in an interview published on Friday. ECB policymakers have started to debate when they should dial back their emergency bond purchases, which have pumped over a trillion euros into the financial system since the start of the pandemic. Lagarde signaled she was not ready to wind down the Pandemic Emergency Purchase Programme (PEPP) just yet.
U.S. job growth likely picked up in June as companies, desperate to boost production and services amid booming demand, raised wages and offered incentives to lure millions of reluctant unemployed Americans back into the labor force. The Labor Department’s closely watched employment report on Friday will likely show that the economy closed the second quarter with strong growth momentum, following a reopening made possible by vaccinations against COVID-19.
Spain posted a record drop in jobless figures for the second month in a row in June, as looser COVID-19 restrictions, increased vaccination rates and the cautious return of tourism buoyed the labor market. The number of people registering as jobless fell by 4.4% from May, leaving 3.61 million out of work, labor ministry data showed on Friday, marking the fourth consecutive monthly decline. The social security ministry said Spain had created a net calendar-adjusted 203,000 jobs last month, thanks largely to robust growth in the services sector as the summer tourism season cranks into gear, drawing in Spanish holidaymakers and raising the size of the workforce to near pre-pandemic levels.
Japan’s household spending likely slowed in May, a Reuters poll showed on Friday, as a new wave of coronavirus infections and a slow vaccination rollout weigh on consumer confidence. Internal affairs ministry data out at 8:30 a.m. on Tuesday (23:30 UTC Monday) is expected to show all household spending jumped 10.9% year-on-year in May, slowing from a 13.0% gain in the prior month, according to a Reuters poll of 16 economists.
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