• The U.S. economy grew at a slightly less brisk pace than initially thought in the second quarter (2.1% vs. forecasted 2.4%) as businesses liquidated inventory, but momentum appears to have picked up early this quarter as a tight labour market underpins consumer spending.
• The report from the Commerce Department on Wednesday also confirmed that inflation pressures moderated last quarter. The economy continues to expand despite 525 basis points worth of interest rate hikes from the Federal Reserve since March 2022.
• "The downgrade to second-quarter GDP growth will be welcomed by Fed officials and reinforces our expectations for a policy pause in September but the door will remain open to further tightening," said Lydia Boussour, a senior economist at EY-Parthenon in New York. "Data point to steady economic momentum into the second half of the year and confirm that a recession isn't on the near-term horizon."
• There were also downward revisions to business spending on equipment and intellectual products. These offset a slight upgrade to consumer spending, which accounts for more than two-thirds of U.S. economic activity. Trade subtracted more from GDP growth than initially estimated.

(Source: Reuters)

• The U.S. economy added more jobs than expected in August, but a rise in the unemployment rate to 3.8% and moderation in wage growth pointed to an easing in labor market conditions, which could bolster expectations that the Federal Reserve will not raise interest rates this month.
• Nonfarm payrolls increased by 187,000 jobs last month, the Labor Department said in its closely watched employment report on Friday. Data for July was revised lower to show 157,000 jobs added instead of the previously reported 187,000.
• The economy needs to create roughly 100,000 jobs per month to keep up with the increase in the working age population.
• Economists polled by Reuters had forecast nonfarm payrolls increasing by 170,000 jobs last month. Striking Hollywood actors and the bankruptcy of a major trucking company had led economists to anticipate slower job growth in August.
• Though demand for labor is slowing, some services businesses like restaurants, bars and hotels remain desperate for workers. Job openings dropped to the lowest level in nearly 2-1/2 years in July, the government reported this week.
• The unemployment rate increased to 3.8% as more people entered the labor force, from 3.5% in July. It remains below the U.S. central bank's latest median estimate of 4.1% by the fourth quarter of this year.

(Source: Reuters)

• Wisynco Group Limited (Wisynco) recorded a net profit of $4.92Bn for the fiscal year ended June 30, 2023, marking a 21.4% increase year-over-year (yoy).
• The company’s revenues surged 24.7% yoy amounting to 48.71Bn. This record-high revenue came despite production challenges and contributed to a gross profit of $16.86Bn, a 27.2% increase over last year’s $13.25Bn. The company also saw an improvement in its gross margin, which stood at 34.6% this fiscal year, compared to 33.9% in the previous year.
• On the expense side, Selling, Distribution & Administrative expenses (SD&A) for the year totaled $10.95Bn or 28.3% more than the $8.53Bn for the corresponding period of the previous year. This was primarily due to expanded business activity and the corresponding increase in variable costs as well as inflationary increases across all expense categories.
• Wisynco stock price has decreased 2.43% since the start of the calendar year. The stock closed Wednesday’s trading session at $17.24 and currently trades at a P/E of 13.2x which is slightly below the Main Market Distribution & Manufacturing Sector Average of 13.4x.
• In terms of future growth, Wisynco has ambitious expansion plans in the pipeline, including the construction of new facilities to enhance production capacity and introduce new product lines. This marks the company's largest capital expansion to date, and it's expected to positively impact revenue streams and operational efficiencies starting from Q2 of the 2024 fiscal year.

(Source: JSE and NCBCM Research)

• The Dominican Republic witnessed a deceleration in its economic activity during the initial half of 2023, achieving a mere cumulative growth rate of 1.2%. This percentage marks a significant drop from the average of 5.6% recorded during the corresponding period last year.
• In the month of June, the Year-on-Year Monthly Indicator of Economic Activity (IMAE) registered a 0.1% increase. Despite this, the government remains optimistic about the near future, attributing the anticipated economic upturn to the Central Bank of the Dominican Republic’s implementation of monetary stimulus measures and increased public investment.
• However, global uncertainties are heightened by the decisions of the United States Federal Reserve regarding its interest rates. Jerome Powell, the president of the Federal Reserve, stated that the central bank will persist with higher rates until inflation is effectively controlled. Nonetheless, he hinted at the possibility of halting the rate hikes in the future.
• In contrast, the Central Bank of the Dominican Republic has maintained its annual monetary policy interest rate at 7.75% for two consecutive months. With domestic inflation within the target range of 4.0% ± 1.0%, the bank acknowledged the influence of implemented monetary and fiscal policies, as well as reduced internal demand pressures, in its latest monetary policy announcement.
• While the Dominican Republic’s economy has been lauded for its dynamism and resilience, the International Monetary Fund (IMF) revised its growth projection for 2023 down to 4%, offering recommendations such as introducing a fiscal responsibility law, broadening the tax base, and reducing exemptions. Similarly, the World Bank trimmed its growth forecast for the country from 4.8% in January to 4.1% in June.
• Considering these forecasts, a consensus suggests that the nation might grow by 3.9% in 2023 and 4.2% in 2024, still positioning it as a standout performer in the region. Overall, Latin America and the Caribbean are projected to witness a growth rate of 1.6% in 2023, with a similar prediction for 2024, given the heightened uncertainties related to global macro-financial conditions.

(Source: Dominican Today)

• Chinese investments in Brazil tanked 78% in 2022 compared with the previous year, hitting their lowest in 13 years as funds committed to resource projects plummeted, the Brazil-China Business Council (CEBC) said on Tuesday, August 29.
• China, Brazil's largest trading partner, funnelled $1.3Bn in direct investments into the country last year, the lowest level since 2009, according to a CEBC study. The performance contrasts with overall foreign direct investment (FDI) in Brazil in 2022, which skyrocketed by 95% to $90.6Bn, the highest in a decade.
• Last year, just 28% of announced Chinese projects worth $4.7Bn went ahead, the CEBC said. That compares poorly with 2021, when pledged investments of $5.9Bn were fully realized, bolstered by two oil projects worth nearly $5Bn.
• Nonetheless, that 2021 result established an unfavourable yardstick for comparison, said CEBC research head Tulio Cariello. Some of the projects could have been held up by license approvals, Cariello said, "which may eventually postpone execution." Chinese mining firm Honbridge, for example, announced investments worth $2.1Bn that failed to proceed due to a pending environmental license.
• While China-sourced funds channelled to Brazil witnessed a sharp decline, Chinese investments globally saw a modest uptick of 2.8% over the past year, growing to $116.8 billion. Since then, Leftist President Luiz Inacio Lula da Silva, who travelled to China in April, has been endeavouring to bolster ties with Beijing, but recent economic indicators from the Asian powerhouse have sparked concern that it might be losing its ability to sustain robust growth.

(Source: Reuters)

• U.S. job openings dropped to the lowest level in nearly 2-1/2 years in July as the labour market gradually slowed, bolstering expectations that the Federal Reserve will keep interest rates unchanged next month.
• The Job Openings and Labour Turnover Survey, or JOLTS report, from the Labour Department on Tuesday also showed the number of people quitting their jobs dropped to levels last seen in early 2021, indicating that Americans were becoming less confident in the labour market.
• That was reinforced by a survey from the Conference Board showing consumers' perceptions of the labour market cooled in August. Nevertheless, labour market conditions remain tight, with 1.51 job openings for every unemployed person in July, compared to 1.54 in June. While that was the lowest ratio since September 2021, it is well above the 1.0-1.2 range considered consistent with a jobs market that is not generating too much inflation. Layoffs are very low by historical standards.
• "Although the labour market is still tight, the degree of excess demand is declining and is coming about through companies reducing the number of vacancies rather than increasing layoffs and unemployment," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York. "There is plenty here to make the case that not only is the labour market rebalancing but at this point it is doing so without pushing up unemployment." "With reports like this, the Fed can most likely keep rates unchanged in September," said Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina.

(Source: Reuters)

• U.S. regulators on Tuesday unveiled plans to force regional banks to issue debt and bolster their so-called living wills. This comes as steps meant to protect the public in the event of more failures.
• The steps are part of regulators’ response to the regional banking crisis that flared up in March, ultimately claiming three institutions and damaging the earnings power of many others. In July, the agencies released the first salvo of expected changes, a sweeping set of proposals meant to heighten capital requirements and standardize risk models for the industry.
• The requirements will create “moderately higher funding costs” for regional banks, the agencies acknowledged. That could add to the industry’s earnings pressure after all three major ratings agencies have downgraded the credit ratings of some lenders this year.
• All American banks with at least $100 billion in assets would be subject to the new requirements, which resemble rules that apply to the world’s biggest banks.
• Impacted lenders will have to maintain long-term debt levels equal to 3.5% of average total assets or 6% of risk-weighted assets, whichever is higher, according to a fact sheet released Tuesday.

(Source: CNBC)

• Director of Tourism, Jamaica Tourist Board, Donovan White, says Jamaica is experiencing a surge in business travel, which is on its way back to pre-COVID levels. He informed that the country’s meetings, incentives, conferences, and exhibitions (MICE) sector is on the rise.
• MICE tourism refers to business-related events that are planned, and professionals from the related sector are brought together in a hospitality setting.
• Speaking at the Caribbean Meeting and Incentive Travel Exchange (CMITE) Breakfast held at the Secrets Wild Orchid Resort in Montego Bay, St. James, on Tuesday (August 22), Mr. White noted that “business is back, and in-person events are once again being well attended”.
• The Director of Tourism pointed out that while MICE travel is not measured by percentages due to the varied sizes of the groups and the dynamic nature of meetings, tourism stakeholders have been reporting bookings for large groups, several months ahead of time. He further pointed out that stakeholders are beginning to see bookings six, twelve, and eighteen months ahead of large groups coming back to Jamaica, which is a good sign for forecasting the ability of arrivals
• The CMITE meetings, which were hosted by wellness brand Questex on the island, connect North American meeting planners and incentive buyers with leading Caribbean and Mexico-based suppliers to foster meaningful industry relationships. While noting that the island is pleased to have been chosen to host CMITE for the third time, Mr. White outlined that Jamaica has put in the work to ensure that it could once again host meetings of this nature.
• The objective of the CMITE series of meetings is to promote Jamaica as a warm-weather destination of choice with the personnel, infrastructure, and strong cultural appeal that will result in reservations for meeting and incentive groups.
• MICE makes up around 20% of Jamaica’s overall tourism product and as such, growth in this area will improve earnings in the sector and by extension, drive economic growth.
• The increase in business-related travel and events is a positive sign for Jamaica's tourism and economy. As this area makes up a large part of the country's tourism income, its growth will lead to more earnings, helping to boost the economy overall.

(Source: JIS News)

• Fitch Solutions forecasts that Peru’s current account deficit will narrow from 4.1% of GDP in 2022 to 2.1% in 2023, a downward revision of its previous figure of 2.5%, as slower import growth is offset by still robust copper exports.
• A stronger-than-expected slowdown in growth in May and June 2023 weighed on employment and private consumption, lowering import demand. Fitch has already seen a significant slowdown in imports since its last report.
• Meanwhile, exports have been and will remain robust, as Fitch’s commodities team remains optimistic about copper production over the next few years. Exports will make up approximately 25.9% of GDP in 2023 on the back of robust mining export growth. This will keep Peru’s goods trade balance firmly in surplus territory at 4.9% of GDP versus a 2015-2019 average of 1.8%.
• Copper production and exports will likely continue to drive a current account deficit below the pre-pandemic average in 2024 and leave the current account deficit at 2.3%.
• Although a fall in remittances is expected in mid-2024 due to a slowing U.S. economy and an uptick in unemployment is anticipated in Peru's manufacturing sector, the country is well-prepared. Peru has a solid cushion of liquid reserves despite its slowing economy, and its external debts remain manageable. Additionally, Peru has more than 12 months of import cover in international reserves, which will bolster external account stability in the upcoming quarters."

(Source: Fitch Solutions)

• The government recently signed an agreement with the Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE) for the development of an Integrated Resource and Resilience Plan (IRRP) to aid in the efficient integration of renewables across the country, in line with its National Energy Policy targets.  CCREEE, which was established in 2018, helps member states navigate their energy transition.
• Bahamas Power and Light (BPL) Chief Executive Shevonn Cambridge at the signing said: “This is about an Integrated Resource and Resilience Plan. That plan looks at the assets the utility has and the goals we have in terms of migrating to more efficient production, particularly the integration of renewables. It looks at how we retire existing assets or how we look at any additional capacity we need and the integration of renewables.”. He also noted that the plan and other renewable energy initiatives are being funded by the Inter-American Development Bank (IDB).
• Dr Gary Jackson, executive director of CCREEE said: “With this plan, we want to look at the mitigation and adoption strategies The Bahamas may need to have given the high heat and hurricanes The Bahamas is experiencing.”
• The Bahamas National Energy Policy 2013 – 2033 was developed to ensure that The Bahamas has a modern, diversified and efficient energy sector that is affordable, reliable and resilient. To assist the Government in achieving its goals, the IRRP plan guides how a country can supply its need for electricity into the foreseeable future.
• CCREEE will gather data to develop and codify the IRRP planning and processes, identify key responsibilities, set timelines for activities and recommend criteria and standards for the development of policy and processes. In effect, it will develop the IRRP within the Bahamas National Energy Policy 2013-2033 framework.
• The agreement between the Bahamas government and CCREEE for the development of an IRRP is a crucial step towards achieving the goals outlined in the Bahamas National Energy Policy 2013-2033. This plan, funded by the IDB, will guide the country in efficiently integrating renewable energy, retiring existing assets, and planning for additional capacity needs. Ultimately, this initiative will contribute to a more affordable, reliable, and resilient energy sector in the Bahamas, better equipped to navigate the challenges posed by high heat and hurricanes.

(Source: CariCris)