This report is a summary of third-party economic research and perspectives to foster communication with business and economic development stakeholders.
Key Economic Insights
- Global: EU reached the target of fully vaccinating 70% of adults against COVID-19. China Manufacturing PMI dropped to the lowest level in 18 months.
- U.S.: Total nonfarm payroll employment rose by 235,000 in August. Goldman Sachs revised down 2021 GDP growth forecast to 5.7%.
- Ohio: Governor DeWine launched The Ohio Residential Broadband Expansion Grant program to improve high-speed internet access in unserved and underserved areas of Ohio.
42% of the world population has received at least one dose of a COVID-19 vaccine. The European Union hit its target of fully vaccinating 70% of adults against COVID-19. Eurozone inflation hit its highest level in almost a decade in August. Consumer prices rose 3% from a year earlier, up from 2.2% in July, and the sharpest rise since November 2011. The European Central Bank aims to keep inflation at 2% but would leave its key interest rate steady if a period of inflation running above that goal appeared to be “transitory.”
China’s Services PMI fell to 47.5 in August, entering contractionary territory for the first time since the pandemic recovery began. Beijing’s Manufacturing PMI dropped to 50.1 in August, the lowest level in 18 months. New orders dropped to 49.6, the first contractionary reading since February 2020. New export orders dropped to 46.7, marking the fourth straight month in contractionary territory.
Over 62% of the U.S. population has received at least one dose of a COVID-19 vaccine, and over 53% is fully vaccinated. The Office of Management and Budget expects consumer prices to rise 4.8% in Q4 from a year earlier, up from 2% forecasted in May. Goldman Sachs revised down their forecast for growth in the U.S. economy this year to 5.7% from an expectation of 6% in August. Goldman raised its forecast for 2022 to 4.6%, up from 4.5%. U.S. consumer confidence dropped in August to a six-month low. The Conference Board’s index fell to 113.8, below projections for a decline to 123. The gauge of current conditions fell to 147.3, the lowest reading since April.
Job openings in the U.S. rose to a record high for the fifth consecutive month in July as demand for workers outpaced hiring. Openings climbed to 10.9M, up from 10.2M in June and above economist expectations for 10M. Openings have now increased for seven straight months. Total nonfarm payroll employment rose by 235,000 in August, and the unemployment rate declined to 5.2%. The labor force participation rate, at 61.7%, was unchanged over the month. Weekly jobless claims fell to a new pandemic low for the second consecutive week. Initial claims fell to 310,000, below economist expectations for 335,000 and the lowest level since the pandemic took hold in the U.S. in March 2020.
ISM’s Manufacturing PMI was 59.9 for the month of August, a slight increase from July’s reading of 59.5, indicating expansion in the overall economy for the 15th month in a row. ISM’s Services PMI was 61.7 in August, with Business Activity Index at 60.1, New Orders Index at 63.2, Employment Index at 53.7, and Supplier Deliveries Index at 69.6. The U.S. International Trade deficit was $70.1B in July, down 4.3% from $73.2B in June. Factory orders increased 0.4% in July after advancing 1.5% in June. Consumer borrowing slowed sharply in July after strong gain in the prior two months.
Ohio Employment & Economic Insights
Nearly 6.2M Ohioans ages 12 and up have started the COVID-19 vaccination process, marking 61.8% of the population currently eligible for COVID-19 vaccines. The State of Ohio initiated the repayment of nearly $1.5B borrowed from the federal government to pay unemployment benefits to eligible Ohioans during the pandemic. Repayment of the loan to the U.S. Treasury is being paid in its entirety with funds from the American Rescue Plan Act.
The Ohio Residential Broadband Expansion Grant program, funded as part of Ohio’s 2022-2023 operating budget, will provide $250M in grants to internet service providers for the construction of broadband projects that improve high-speed internet access in unserved and underserved areas of Ohio. Could Cleveland’s “boring climate” help bring business to Northeast Ohio?
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