Activity in the US services sector rebounded sharply in June, almost returning to its pre-COVID-19 pandemic levels. However, a resurgence in coronavirus cases that has forced some restaurants and bars to close again threatens the nascent recovery.
The Institute for Supply Management (ISM) said on Monday that its non-manufacturing activity index jumped to 57.1 last month, the highest since February, from 45.4 in May and 41.8 in April, which was the lowest since March 2009. A reading above 50 indicates growth in the sector, which accounts for more than two-thirds of US economic activity. The upbeat survey, however, has been overshadowed by raging COVID-19 cases in large parts of the country.
Meanwhile, UK Chancellor of the Exchequer Rishi Sunak on Wednesday announced a package worth £30 billion to stimulate the economy which has been severely hit by the pandemic.
Among a raft of measures, the package includes tax cuts and bonuses to support jobs. The latest measures are part of the government’s three-phase plan to boost the economy.
The chancellor also announced a job retention one-off bonus of £1,000 for each furloughed employee who is still in employment as of January 31, 2021.
“We are, as I’ve said before, entering into a very significant recession. We know that that is happening” Sunak said. But he also struck a note of optimism, adding: “We don’t want people to be left without hope or opportunity.”
Finally, in China, consumer inflation ticked up slightly last month as floods in southern China and a new wave of COVID-19 infections in Beijing caused vegetable prices to rise due to short supply, an official statement said on Thursday.
The consumer price index, or CPI, which measures the prices of a basket of consumer goods and services, rose 2.5 per cent year-on-year last month, up slightly from a 2.4 per cent gain in May and ending four successive months of decline, data from the National Bureau of Statistics showed. At the same time, downward pressure on factory-gate prices eased as domestic demand recovered and global commodity prices picked up.
This report was compiled by Bank of Valletta Ltd for general information purposes only.