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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: Nearly 40% of the world population has received at least one dose of a COVID-19 vaccine.
- U.S.: Federal Reserve Chairman Jerome Powell indicated that the central bank is likely to begin tapering before the end of the year. The core PCE price index was up 3.6% from a year earlier, matching the biggest jump since 1991.
- Ohio: The Air Force selected the Ohio Air National Guard Base in Mansfield as the preferred site for new Cyber Warfare Wing.
Global Insights
Nearly 40% of the world population has received at least one dose of a COVID-19 vaccine. The IMF allocation of Special Drawing Rights (SDRs), equivalent to approximately $650B, became effective this week to address the long-term global need for reserves and stability of the global economy. The U.S. will receive an estimated $79.5B from the funds, with China ($29.2B), Germany ($25.5B), the UK ($19.3B) and Japan ($29.5B) among other top recipients.
Europe’s service sector growth exceeded manufacturing growth for the first time since the pandemic took hold last year as the manufacturing industry continues to face supply shortages. Germany’s GDP grew an adjusted 1.6% in Q2, above estimates of 1.5% and following a revised Q1 contraction of 2%. Europe’s largest economy expanded by a calendar-adjusted 9.4% in Q2, leaving economic activity 3.3% below the pre-crisis levels. U.K. car production fell to a new low in July, the worst performance since 1956.
U.S. Insights
Over 60% of the U.S. population has received at least one dose of a COVID-19 vaccine, and over 51% is fully vaccinated. Pfizer received full approval from the FDA for its COVID-19 vaccine. Initial jobless claims totaled 353,000 for the week ended Aug. 14, and continuing claims dropping 3,000 from the previous week to 2.86M. The University of Michigan’s gauge of consumer sentiment fell to a preliminary August reading of 70.2 from a final July reading of 81.2, significantly below economist expectations for 81.3 and the lowest sentiment reading since December 2011. There have only been six larger drops in the index in the history of the survey.
Real GDP for Q2 2021 was revised upward to 6.6% from advance estimates of 6.5%. Real gross domestic income (GDI) increased 1.6% in Q2, following an increase of 6.3% in Q1. Conference Board’s Leading Economic Index rose 0.9% in July, above consensus forecasts for a 0.7% rise and following a 0.5% increase in June. Durable goods orders decreased 0.1% in July to a seasonally adjusted $257.2B and demand for durable goods has increased in 13 of the last 15 months.
Purchases of goods and services rose 0.3% in July , and personal incomes rose 1.1%. The personal consumption expenditures price gauge, which the Federal Reserve uses for its inflation target, climbed 0.4% from a month earlier. The core PCE price index rose 0.3% in July, and is up 3.6% from a year earlier, matching the largest jump since 1991. Federal Reserve Chairman Jerome Powell indicated that the central bank is likely to begin withdrawing some of its easy-money policies before the end of the year.
U.S. business activity slowed to an eight-month low in August. IHS Markit’s August composite index dropped to 55.4, and has decreased each month since hitting a record 68.7 in May. Factory activity dropped to 61.2, the lowest reading in four months. Input prices increased to the second-highest reading since 2009, and prices received also advanced. Services activity declined to the slowest pace of growth since December, while measures of new business dropped to a one-year low.
The U.S. merchandise-trade deficit narrowed to $86.4B from $92.1B in June, the smallest level in three months. Imports fell from the highest on record, declining 1.4% to $233.9B, led by a drop in the value of inward-bound shipments of consumer goods. The only category to increase from July was automotive vehicles. Existing home sales rose 2% in July to a seasonally adjusted annual rate of 5.99M, up from a 1.6% gain in June. Sales were up 1.5% from July 2020. The inventory of homes for sale at the end of July was 1.32M, up 7.3% from June and at the highest level since October 2020. New home sales rose 1.0% to a seasonally adjusted annual rate of 708,000 units in July after three straight monthly declines.
Ohio Employment & Economic Insights
Nearly 150 Ohio businesses are among the fastest-growing private companies in the U.S., according to a new list released by Inc.com. Those companies brought $14.4B in revenue and added over 16,700 jobs to the Ohio economy. The Air Force selected the Ohio Air National Guard Base in Mansfield as the preferred site for new Cyber Warfare Wing.
More than 6M Ohioans ages 12 and up have started the COVID-19 vaccination process, marking 60% of the population currently eligible for COVID-19 vaccines.
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Resources
- Ohio Department of Health’s COVID-19 Website: coronavirus.ohio.gov
- JobsOhio’s resource portal and information about Open, Secure Supply Chains in Ohio.