What's going on?
A spate of economic data was released on Tuesday: Germany’s economy grew faster than expected, China’s is looking a little worse for wear, and the UK’s is a mixed bag.
What does this mean?
China’s had a rough time lately. The country’s industrial output and retail sales growth missed expectations in July. And the pace of fixed asset investment (a.k.a. business investment in physical things – like buildings, vehicles and machinery) for the year so far was the slowest since 1996 (when the Spice Girls debuted).
Back in Germany (Europe’s largest economy), despite trade tensions threatening its vital auto industry, household and government spending helped economic growth to beat forecasts. In the UK, unemployment is down to the lowest level since 1975 – which sounds good, but it’s more complicated under the hood. People leaving the workforce probably helped the rate drop (fewer people looking for work and unable to find it equals lower unemployment) and more people found jobs, too – but not as many as expected.
Why should I care?
For you, personally: Less cash in your back pocket?
While unemployment dropped, wage growth in the UK slowed. It was the weakest in a year, which seems slightly strange – especially with the UK experiencing a record number of European nationals leaving (i.e. (Br)exiting the UK workforce). Some say wage growth will bounce back (as employers will have to pay more to attract the remaining workers), while others say that this is the new norm.
The bigger picture: No couples therapy just yet.
As trade relations between the US and China (nay, the world?) remain strained, the former’s outperforming the latter. America’s economy is booming, while China’s is slowing down – which might mean that China’s taking bigger hits, at least for now. China’s working to increase domestic demand (i.e. demand that isn’t subject to external tariffs) and the central bank’s pumping cash into the economy. With more tariffs due to kick in next week, it doesn’t look like a stalemate’s on the cards anytime soon.