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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: The International Monetary Fund cut its forecast for global GDP growth in 2021 to 5.9% as developing countries continue to struggle with the spread of COVID-19.
- U.S.: Goldman Sachs cut its forecast for U.S. GDP growth in 2021 to 5.6% amid impacts from COVID-19 on consumer spending, reduced fiscal support and global supply disruptions.
- Ohio: Ohio’s startups and high-growth technology companies for the first time have topped $2B in venture capital investment in 2021, with three months yet to go in the year.
Global Insights
48% of the world population has received at least one dose of a COVID-19 vaccine. The International Monetary Fund cut its forecast for global growth in 2021 to 5.9%, from 6.0% in July, maintaining its projection for 4.9% growth in 2022. 136 countries, representing more than 90% of global GDP, agreed to a global minimum corporate tax rate of 15% according to The Organization for Economic Cooperation and Development. The change will reallocate more than $125B of profits from around 100 of the world’s largest and most profitable MNEs to countries worldwide starting in 2023.
Euro Area industrial production fell 1.6% in August as supply chain and production challenges continued to weight on output. Canada saw a net gain of 157,100 new jobs in September, pushing employment back to its pre-pandemic levels as the jobless rate (6.9%) fell to the lowest level since February 2020. Japan’s wholesale inflation hit a 13-year high in September, rising 6.3% on an annual basis, above forecasts for 5.9%, as rising global commodity prices continued pushing up import costs. Wholesale prices in Germany increased 13.2% on an annual basis in September, the highest rate since June 1974. Exports from China rose 28.1% in September to $305.7B, above economist forecasts and an acceleration from the 26% pace in August. China’s producer price index rose 10.7% in September from a year earlier, marking the fastest pace of increase since data was first released in October 1996.
GlaxoSmithKline plans to construct a new $164M headquarters for its soon-to-be-independent consumer healthcare business. Volkswagen plans to finalize the location for its planned battery cell plant in eastern Europe by Q2 2022. Fisker is launching a specialty vehicle engineering and development division in the UK. CATL plans to build a battery material recycling facility in Hubei Province, China.
U.S. Insights
Over 65% of the U.S. population has received at least one dose of a COVID-19 vaccine, and 56.2% is fully vaccinated. Goldman Sachs cut its forecast for US economic growth for a third consecutive month, citing impacts on consumer spending, reduced fiscal support and the global supply shortage of semiconductors. The bank downgraded its forecast for annual GDP growth for 2021 to 5.6%, from 5.7% previously, and to 4% from a prior estimate of 4.4% for 2022. The NFIB Small Business Optimism Index decreased in September to 99.1 as labor shortages and inflation impacted business operations. 51% of owners reported job openings that could not be filled, a 48-year record high for the third consecutive month. The University of Michigan Preliminary Consumer Sentiment Index dropped to 71.4 in September from 72.8 in August, below expectations for 73.1.
Initial jobless claims were 293,000 for the week ended October 9, below expectations for 320,000 and a drop from the revised 329,000 during the prior week. Continuing claims for the week ended October 2 were 2.593M, below expectations for 2.67M and a drop from the 2.727M during the prior week Job openings fell to 10.4M in September from 11.1M in August, below economist expectations for a drop to 10.93M and marking the first decline since December 2020. Quits rose to 4.3M from 4M in August, the highest on records dating back to December 2000. The Consumer Price Index rose 0.4% in September, above forecasts for 0.3% and following a 0.3% increase in August. In the 12 months through September, the CPI increased 5.4%. Core CPI rose 4.0% on a year-on-year basis, matching the 4.0% increase in August. The Producer Price Index (PPI) for final demand increased 0.5% in September to 8.6% for the 12 months through September, the largest advance since 12-month data were first calculated in November 2010. Core PPI rose 0.1% in September to 5.9% for the 12 months through September. U.S. retail sales increased 0.7% in September, following an upwardly revised 0.9% increase in August as demand for merchandise remained robust. Excluding autos, sales increased 0.8% in September.
The Federal Open Market Committee voted unanimously to hold the central bank’s benchmark short-term borrowing rate at zero to 0.25% but signaled it could begin tapering its monthly asset purchases by mid-November, with a targeted end date of purchases by mid-2022. The committee scaled back their GDP projections for 2021, but raised their outlook for inflation and indicated they expect unemployment to be lower than earlier estimates.
Merck has asked the FDA to authorize emergency use of its experimental antiviral pill to treat mild to moderate COVID-19 in adults. Tesla is relocating its HQ from California to Texas. Emerson Electric is merging its software units with rival Aspen Technology in a deal worth roughly $11B. General Motors reached an agreement with partner LG Electronics to recover $1.9B in costs for a recall of batteries in its Chevrolet Bolt EV. Apple warned it will likely cut its iPhone 13 production goal this year by up to 10M units due to a shortage of computer chips.
Ohio Employment & Economic Insights
More than 6.4M Ohioans have started the COVID-19 vaccination process, marking 64% of the population currently eligible for COVID-19 vaccines.
Ohio’s startups and high-growth technology companies for the first time have topped $2B in venture capital investment in 2021, with three months yet to go in the year. The deals have attracted firms from Silicon Valley, New York City, Atlanta and around the country that never looked Ohio’s way before.
Amazon’s plans to build a new one-million-square-foot fulfillment center in Canton, bringing 1,000 new jobs to Stark County. Amazon has invested just over $12B in Ohio from 2010 until 2020. 22 Ohio Communities will receive grants to fund infrastructure projects and public facility improvements.
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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.