• Middle- and low-income U.S. families now have significantly fewer liquid resources like bank deposits than they were on track to have before the disruptions of the COVID-19 pandemic, creating financial strains that pose a risk to consumer spending, the backbone of the economy.

• Research published on Monday by the Federal Reserve Bank of San Francisco showed that for the top 20% of households by income, liquid assets - including cash and funds in savings, checking and money market accounts - rose sharply in 2020 into early 2021. They then dropped gradually and are now about 2% below what would have been expected without the pandemic shock.

• However, for the rest of American households, those liquid assets rose less sharply and the excess was depleted earlier and is now about 13% lower than the projected path prior to the pandemic. At the same time credit card delinquencies among these middle- and low-income families rose earlier, faster, and to "notably higher" rates than for high-income families, they showed.

• S. central bankers have said that continued strength in the real economy has given them room to hold the policy rate in its current 5.25%-5.50% range so as to keep up the downward pressure on inflation. However, recent economic data including a report showing a jump in the unemployment rate to a post-pandemic high of 4.3% and a slowdown in hiring in July - have fueled fears that policy may be becoming too restrictive.

• While consumer spending contributed significantly to the stronger-than-expected pace of economic growth in the second quarter, its monthly growth rate has slowed. Spending growth averaged 0.3% in the three months through June, its slowest average pace in more than a year. Last week, Chicago Fed President Austan Goolsbee said the uptick in credit card delinquencies was among the factors he was watching as a possible sign that policy may be getting tighter than warranted.

(Source: Reuters)

• The US budget deficit exceeded $1.5 trillion with two months to go until the end of the fiscal year, down slightly on 2023 though vastly larger than pre-pandemic times. The $1.52 trillion gap for the 10 months through July was down 6% from the same period last year, Treasury Department data released Wednesday showed. For the month of July, the deficit was $244 billion — 16% smaller than July 2023, adjusted for calendar differences. The adjusted year-to-date narrowing was 5%.

• Higher revenues helped narrow the deficit. Receipts have risen in part because of a deferral of tax deadlines from fiscal 2023 into this year in states that suffered from natural disasters. Affected areas included most of California.

• The interest burden on outstanding US debt remained a major drag on the budget. Interest costs in the first 10 months of the fiscal year totalled $956 billion, up 32% from 2023. The Federal Reserve’s aggressive interest-rate hiking campaign, aimed at quelling inflation, has made debt more expensive to issue for the federal government.

• The weighted average interest rate on outstanding US interest-bearing government debt was 3.33% at the end of July — the highest since January 2010 and up about half a percentage point from a year before.

(Source: Bloomberg)

• TransJamaica Limited recorded net profit of US$13.92Mn for the six months that ended June 30, 2024, a 26.5% yoy increase. The outturn reflects the impact of robust topline growth and modest growth in expenses.
• Aided by higher traffic volumes and movements in the toll tariff, which is reviewed annually, revenue for the six-month period was US$39.65Mn, US$3.44Mn higher when compared to the same period in 2023.
• The company reported operating expenses of US$11.37Mn, marking a 3.8% rise from the US$10.96Mn recorded during the corresponding period in 2023. Elevated intangible amortization and security expenses, which were partly counterbalanced by a reduction in maintenance activities throughout the period, resulted in modest growth in operating expenses.
• However, administrative expenses rose 18.0%, given salary adjustments following a restructuring exercise and the usual annual inflationary increments. The team expanded with the recruitment of extra technical personnel, including a special projects manager tasked with spearheading the infrastructure enhancements throughout the network.
• TransJa's stock price has increased by 13.3% since the start of the calendar year. The stock closed Monday’s trading session at $3.07 and currently trades at a P/E of 9.0x, which is below the Main Market Energy, Industrial, and Materials Sector Average of 9.6x.
• TransJamaican Highway Limited (TJH) recently proposed a US$20.3Mn offer price, along with potential Upside Formula amounts, to acquire the concession to operate Phase 1C of the Highway 2000 toll roads until November 20, 2036. The government’s acceptance is subject to contract and additional conditions. The addition of this new concession should enhance the company's portfolio by introducing a fourth toll road, which is expected to bolster earnings when it becomes operational.

(Sources: JSE and NCBCM Research)

• The Jamaica Business Development Corporation (JBDC) served 2,711 clients from the micro, small, and medium-sized enterprise (MSME) sector in 2023, representing various industries.
• The information is contained in the Planning Institute of Jamaica (JIS) Economic and Social Survey Jamaica 2023, which was tabled in Parliament recently.
• Manufacturing accounted for 16.8% of clients served, followed by the Service sector at 11.1% and Retail at 10.8%. “Another 9.1% included Agriculture, Forestry, Fishing and Hunting. Accounting for the remaining 52.2% were Education, Gift and Craft, Fashion/Apparel, Accommodation, Aromatherapy, Agro-processing, Mining, Finance and Insurance, Accommodation, and Food Services,” the survey said.
• Female-headed MSMEs comprised 50.7% of those assisted, while male-headed MSMEs accounted for 34.7%, with approximately 14.6% being co-owned. The JBDC also conducted 73 virtual webinars, training sessions, and seminars, benefiting more than 2,248 individuals.
• The operationalisation of the Essential Oils Incubator Project in December and the renovated agro-processing incubator also were among the initiatives pursued by the Corporation last year. This project, supported by government funds, provides entrepreneurs in the essential oils industry with access to capital-intensive manufacturing facilities. The agro-processing initiative, funded by the European Union (EU) and managed by the Caribbean Development Bank (CDB), opened in November 2023.
• Equipped with essential machinery, the incubator serves to boost production and exports among micro and small agro-processors. The survey further said that the facility aims to achieve Food Safety System Certification (FSSC) 22000 for the incubator to meet international standards.

(Source: JIS)

• Brazil recorded a foreign trade surplus of US$ 7.6Bn as sales abroad reached an all-time high of US$ 30.9Bn in July, according to data released Tuesday by the Ministry of Development, Industry, Trade, and Services, which represented a 6.6% drop from the US$ 8.2Bn surplus in July 2023, Agencia Brasil reported.
• Brazilian exports hit a record high of $30.9Bn in July, fueled by strong demand for soybeans, coffee, iron ore, sugar, beef, and steel. On the other hand, imports also went up from July 2023, reaching a total of US$ 23.3Bn. South American exports totaled US$ 198.2 B so far this year, a 2.4% increase compared to the first seven months of 2023. Imports reached US$ 148.6Bn, up 5.6% over the same period.
• The European Union, China, and the United States stood out as the main destinations for Brazilian exports in July, with growth rates of 20%, 16.3%, and 15.3%, respectively. However, due to the economic crisis in Argentina, sales to the neighboring country continued to decline last month.
• According to Herlon Brandão, Director of Foreign Trade Statistics and Studies at the Ministry of Development, Industry, Trade, and Services, exports in 2024 have been relatively stable. This contrasts with 2023, when sales fluctuated significantly in the first half of the year.
• “This stability is attributed to increased export volumes, while prices in general are falling. Our forecast for 2024 is positive, with an expected 1.7% growth in Brazilian exports by the end of the year,” Brandão explained.

(Source: MercoPress)

• Colombia's economy is forecast to have grown 2.2% in the second quarter of 2024 from the same period a year earlier, picking up pace from the first three months, a Reuters poll showed on Thursday.
• If the median estimate from 10 analysts is realized, it would represent a significant acceleration from Colombia's 0.1% annual GDP growth in the second quarter of 2023 and the 0.7% recorded in the first quarter of 2024. It would also be higher than the central bank's forecast of 1.8% for the three months to end-June.
• "In general, the economy seems to have bottomed out and we have a very gradual recovery," said Sergio Olarte, chief economist for Colombia, adding that the agricultural sector's performance and increased government spending may have contributed to the growth.
• Colombia's economic growth has been affected by a high benchmark interest rate, currently 10.75%, as well as by stubborn inflation, which stood at 7.18% for the 12 months to end-June, well above the central bank's 3% target.
• The economy was forecast to expand 0.81% in the second quarter of 2024 versus the first. Analysts now see Latin America's fourth-largest economy growing by 1.5% this year, up from 1.3% in the previous survey. For 2025, analysts continue to see GDP growth at 2.6%.

(Source: Reuters)

• Shipping giant Maersk, considered a barometer for global trade, is not seeing signs of a U.S. recession as freight demand remains robust, the company’s chief executive said Wednesday. “We’ve seen in the last couple of years, actually, [the shipping container] market remaining surprisingly resilient to all the fear of recessions that there has been,” Vincent Clerc told CNBC’s “Squawk Box Europe” Wednesday, adding that container demand was generally a good indicator of underlying macroeconomic strength.
• U.S. inventories — goods being stored before delivery or processing — “are higher than they were at the beginning of the year, but they are not at a level that is worrisome or that seems to indicate a significant slowdown right in the offing,” Clerc said, despite noting some unpredictability in numbers for companies replenishing stocks.
• “We look also at purchase orders from a lot of retailers and consumer brands that need to import into the U.S. for the coming month of demand, and it seems still to be pretty robust ... at least the data and the indicators that we’re having seem to point toward still some good level of confidence that the current consumption levels in the U.S. will continue.”
• A report released by leasing platform Container xChange on Wednesday said indicators suggest inventories are higher than demand, meaning a less “prosperous time” in the coming months for container traders, the logistics market and retailers who stockpiled.
• Maersk’s Clerc said the company had been surprised by the resilience of container volumes across the last few years, and said it expected that to continue in the coming quarters — with no indication the global economy is heading toward recessionary territory.

(Source: Reuters)

• The number of Americans filing new applications for unemployment benefits fell more than expected last week, calming fears the labour market was unraveling and reinforcing that a gradual softening remains intact.
• Initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 233,000 for the week ended Aug. 3, the Labour Department said on Thursday, the largest drop in about 11 months. Economists polled by Reuters had forecast 240,000 claims for the latest week.
• It also adds more evidence to the possibility that the severity of last week's worse-than-expected monthly payrolls report for July was partly an outsized blip due to the record number of people unable to work because of bad weather.
• Claims have been on a roughly upward trend since June, with part of the rise blamed on volatility related to the motor vehicle plant shutdowns for retooling and disruptions caused by Hurricane Beryl in Texas. Unadjusted claims dropped 13,589 to 203,054 last week.
• Over the past few weeks, overall claims have been hovering near the high end of the range this year, but layoffs remain generally low. Government data last week showed the layoffs rate in June was the lowest in more than two years. The slowdown in the labor market is being driven by less aggressive hiring as the Fed's interest rate hikes in 2022 and 2023 dampen demand.
• The Fed also closely monitors how jobless rolls compare to the size of the labor force to gauge the health of the jobs market. Growth in the labor force has largely kept pace with the gradual rise of those claiming jobless relief and is about where it was before the coronavirus pandemic.

(Source: Reuters)

• Fifty-seven companies have been onboarded under phase four of the Jamaica Promotions Corporation (JAMPRO) EXPORT MAX program. EXPORT MAX was designed to enhance the competitiveness and sustainability of Jamaican companies to position themselves to enter new and existing international markets to facilitate growth.
• The Minister of Investment and Commerce, Senator Aubyn Hill, praised the organizers of the initiative for offering vital support to micro, small, and medium-sized enterprises (MSMEs) that are looking to broaden their market reach internationally.
• “The importance of exporting cannot be overstated. It is the engine that will drive our GDP growth and elevate our per capita GDP. I am particularly proud of the 57 companies in the EXPORT MAX program,” he said, pointing out that 36 entities are operated by women.
• Meanwhile, JAMPRO President Shullette Cox has stated that the agency has recognized the persistent challenges faced by MSMEs in entering international markets through ongoing dialogue with exporters. In response, the program was redesigned and expanded during the phase for the third cohort, utilising public-private partnerships (PPPs) to respond to the MSMEs’ needs.
• She further highlighted that EXPORT MAX will aid participating entities in unlocking their full export potential through JAMPRO’s advocacy agenda, mentorship, and coaching program, as well as tailored development and promotional solutions.
• Launched in 2011, the EXPORT MAX program was implemented by JAMPRO in partnership with the Jamaica Business Development Corporation (JBDC) and Jamaica Manufacturers and Exporters Association (JMEA). JAMPRO provides technical support, while the JBDC facilitates capacity-building through targeted interventions to equip participating firms to access and service identified export markets.

 (Source: Caribbean National Weekly)

• Latin America and the Caribbean recorded a second consecutive year of decline in the flow of global foreign direct investment (FDI), receiving US$184.304 billion last year. This is 9.9% lower than that registered in 2022 but remains above the average of the last decade, the Economic Commission for Latin America and the Caribbean (ECLAC).
• The weight of foreign direct investment inflows in the region's GDP also decreased since in 2023, it represented 2.8%. However, the region's participation in total global FDI flows (14%) was higher than the average percentage in the 2010s (11%).
• The decrease in FDI flows received by Brazil (-14%) and Mexico (-23%), the two countries with the largest participation in total inflows, explains the result of the region. In South America, Peru also saw a fairly sharp decline in FDI inflows (-65%), while Argentina and Chile saw an increase (57% and 19%, respectively).
• However, Central America and the Caribbean received more investments than in 2022 (12% and 28%, respectively). In Central America, nearly all the countries received more FDI, with notable growth in Costa Rica (28%) and Honduras (33%), while the increase in the Caribbean is due mainly to greater inflows in Guyana (64%) and the Dominican Republic (7%).
• FDI inflows into Jamaica were 18% higher in 2023 than in 2022. However, the total amount, US$ 377 million, was below the average of the last decade, and the momentum of the pre-pandemic period has never been regained. Inflows were mainly concentrated in the service sector, which accounted for 85% of the total and registered its largest inflows since 2016. The attractiveness of the service sector in Jamaica was also reflected in project announcements, which, in the case of business services, amounted to some US$ 10 million, 82% higher than the amount announced in 2022.
• “Foreign Direct Investment can help tackle, in particular, the first of the three development traps in which Latin America and the Caribbean is caught: the trap of low capacity for growth. To this end, we need policies to attract investments that put emphasis not only on attracting them but also on what happens once they are established, and that connect these policies with the productive development policies of countries and their territories. All of this requires strengthening the technical, operational, political and prospective (TOPP) capabilities in this area,” ECLAC’s Executive Secretary, José Manuel Salazar-Xirinachs, said.

(Source: United Nations)