• U.S. economic activity expanded at a slight-to-modest pace from late May through early July. Firms are expecting slower growth ahead as they also reported signs the jobs market continues to soften. The softening job market aligns with the Federal Reserve's recent pivot to more keenly assessing slowing labour market demand to ensure it doesn't wait too long before cutting interest rates.
• "Economic activity maintained a slight-to-modest pace of growth in a majority of districts this reporting cycle," the Fed said in its survey released on Wednesday, which polled business contacts across the central bank's 12 districts through July 8.
• "Expectations for the future of the economy were for slower growth over the next six months due to uncertainty around the upcoming election, domestic policy, geopolitical conflict, and inflation," the Fed survey said.
• The Fed's analysis, released roughly every six weeks, comes as Fed Chair Jerome Powell and his colleagues emphasised that risks on inflation and jobs are now in balance. Earlier on Wednesday two top Fed officials said interest rate cuts are "getting closer," remarks that appear to set the stage for a lowering of borrowing costs in September.
• Fed officials recently have said the labour market has come into better balance thanks to an influx of workers, many of them foreign-born, a development also represented in Wednesday's report. The Boston Fed said Cape Cod contacts noted normal levels of availability of foreign-born workers through short-term visa programs, which support the seasonal labour demand in the area.
• The Fed is trying to engineer a so-called "soft landing" for the economy, in which economic growth gradually slows and the unemployment rate remains as inflation, which spiked to a 40-year high two years ago, returns to the Fed's 2% target rate.
• The unemployment rate hit a 2.5-year high of 4.1% in May, with annual wages growing at the slowest pace in three years amid an expanding labour pool, the latest government data showed.

(Source: Reuters)

• The European Central Bank kept interest rates unchanged as expected on Thursday, with its president Christine Lagarde saying a move in September was "wide open".
  Investment indicators point to muted growth in 2024, she continued, noting that the eurozone had probably grown at a slower pace in April-June than the 0.3% of the first quarter.
• The euro was left unchanged by Thursday's decision, which had been telegraphed by policymakers in recent weeks. Now, the focus shifts to September's meeting, which will come at around the time that markets also see the U.S. Federal Reserve cutting.
• The ECB's key concern is that domestic prices, particularly for services, are moving sideways, while relatively quick wage growth threatens to perpetuate inflation above the ECB's target.
• The economy also remains relatively weak, with a string of surveys pointing to anaemic growth, easing fears that buzzing summer activity, particularly in tourism, will further fuel price pressures.

(Source: Reuters)

• Consumer prices rose 1.1% in June 2024, with the All Jamaica Consumer Price Index (CPI) rising from 134.9 in May to 136.4 in June.
• The main contributor to this movement was a 1.4% increase in the index for the heaviest weighted division, ‘Food and Non-Alcoholic Beverages’. The index for the class ‘Vegetables, tubers, plantains, cooking bananas and pulses’ rose 6.8% during the month on the back of higher prices for some agricultural produce, primarily vegetables, such as cabbage, carrot, tomato and yam.
• The inflation rate was also impacted by an 0.8% increase in the index for the ‘Housing, Water, Electricity, Gas and Other Fuels’ division, which was largely influenced by higher electricity rates. Higher cost of rent also contributed to the increase; with actual rent increasing by 0.4% and imputed rent up by 1.0%. However, the overall inflation was tempered by a 1.8% fall in the index for the ‘Water Supplies and Miscellaneous Services related to the Dwelling’ due to lower water and sewage rates.
• Additionally, there was a 1.3% increase in the index for the ‘Transport’ division mainly due to the revised fare structure of the Jamaica Urban Transit Company Limited (JUTC).
• Given the sharp increase in consumer prices for June, the point-to-point inflation rate was 5.4%. This was 0.2 percentage points higher than the 5.2% recorded for May 2023 to May 2024. The divisions making the largest contribution to the point-to-point inflation rate were ‘Food and Non-Alcoholic Beverages’ (4.0%), ‘Transport’ (11.1%) and ‘Housing, Water, Electricity, Gas and Other Fuels’ (5.4%). The calendar year-to-date inflation rate as of June 2024 was -0.3%.
• At its last monetary policy meeting in June, the BOJ kept its policy rate at 7.00% and agreed to start gradually easing its monetary policy stance. However, with the recent passage of Hurricane Beryl, disruption to produce supplies could put upward pressure on food prices. This upward pressure could delay the BOJ’s plans to ease rates as food prices are a key component in Jamaica’s CPI basket. The next policy decision will be on the 20th of August.

(Sources: STATIN & NCBCM Research)

• The Statistical Institute of Jamaica (STATIN) revised its Labour Force Survey (LFS) to incorporate the latest international standards and guidelines from the International Labour Organization (ILO). This revision resulted in a significant change in the definition of employment and unemployment. 
• Additionally, the reference week for the LFS has shifted from the last full week of the previous quarter to the first full week of the current quarter and the minimum age for inclusion in the LFS has been raised to 15, which is consistent with the ILO recommendations (previously 14 years old).
• STATIN further noted that these changes represent a break in the series, and as such, data comparability with previous quarters is not advised. The unemployment rate in October 2023 was at a record low of 4.2%.
• That said, the LFS revealed that the unemployment rate in January 2024 was 5.4%. In January 2024, the labour force comprised 1,486,400 persons, 788,500 males (53.0%) and 697,900 females (47.0%), with an overall labour force participation rate of 68.9%.
• 1,405,700 members of the labour force were employed in January 2024, with 757,200 employed males (53.9%) and 648,500 females (46.1%). Among the employed population, 28,100 or 2.3% were underemployed (time-related), meaning they worked part-time but wanted additional hours.
• The occupation group with the highest number of employees was ‘Services and Sales Workers’, employing 328,600 individuals. The second largest was ‘Elementary Occupations’, employing 197,900 individuals then ‘Skilled Agricultural, Forestry and Fishery Workers’ which employed 188,200 persons. Regarding industry groups, ‘Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles’ was the largest employer, engaging 266,500 individuals (19.0%)
• The unemployment rate for January 2024 was 5.4%. There were 80,700 unemployed persons; females accounted for 61.2% of those unemployed. The number of unemployed youths (persons aged 15 -24 years) was 32,300, of which 17,600 or 54.5% were females.
• Outside the labour force, there were 669,400 individuals, with more females (399,200) than males (270,200). There were 142,200 males and 146,600 females within the youth population of 15 to 24 years outside the labour force. Additionally, there were 100,700 youth who were not employed, not enrolled in educational activities or currently in training (NEET), of which 49,400 were males and 51,400 females.

(Source: STATIN)

• Commercial banks in Barbados have committed to adhering to new Central Bank Market Conduct Guidelines aimed at enhancing transparency and fairness in the financial services industry, according to the head of the banking association.
• Effective on Friday, July 12, the guidelines, set minimum standards for interactions between licensed financial institutions and their clients. The new guidelines address five key areas: bank fees and charges, accessibility, opening accounts, closing accounts, and complaints. They also offer recommendations for improving communication with customers.
• Under the new rules, banks and finance companies must seek the Central Bank’s non-objection at least 60 days before implementing new fees or increasing existing ones. Customers must be notified 30 days in advance of approved changes. The guidelines also prohibit charges for electronic fund transfers or cash management transactions under $ 10,000 per day.
• To promote inclusivity, physical bank locations must be wheelchair accessible and navigable for the visually impaired. Digital interfaces must accommodate various disabilities. As of July, all commercial banks must offer at least one no-fee account and low-fee accounts for vulnerable groups, including pensioners, minors, and students.
• The guidelines also outline procedures for opening and closing accounts, ensuring compliance with Anti-Money Laundering and Combating the Financing of Terrorism (AML-CFT) laws. Banks must provide clear timelines and periodic updates during the account application process, aiming to decide within three to five business days.
• Central Bank Governor, Dr Kevin Greenidge, stressed the importance of these regulations for maintaining consumer confidence in financial institutions. “By issuing and the financial institutions adhering to these, it ensures that we are able to, one, provide a very transparent system, but also be fair to consumers for their confidence in our financial institutions,” he said. The governor also highlighted the potential impact on economic growth, stating, “The more transparent you are, the easier it is to do business; it’s clear rules and guidelines, and so market conduct pulls all those together into a coherent, integrated structure that people can easily follow.”

(Source: Barbados Today)

• Grand Bahama tourism stakeholders welcome the news of increased airlift to the islands this fall, with foreign air arrivals over the first five months showing an 8% year-over-year (YoY) increase.
• The Ministry of Tourism, Investments, and Aviation recently announced that Grand Bahama Island is poised to receive more airlift boosts this fall 2024. At the end of 2023, Grand Bahama experienced a 33% growth in foreign air arrivals, the largest YoY percentage growth compared to all the islands of The Bahamas.
• For the first five months of 2024, the island’s foreign airlift arrivals had already outperformed the same period in 2023 by some 8%, putting the island on a trajectory to exceed pre-Dorian figures.
• “Our priority to focus on increasing airlift into Grand Bahama is a sign of our commitment to this community and our product partners, as we continue to position the island to benefit from the significant investments in its project pipeline,” said Chester Cooper, Deputy Prime Minister and Minister of Tourism, Investments & Aviation.
• From September 6 through October 3, 2024, Bahamasair is set to increase capacity on its Freeport to Fort Lauderdale route. American Airlines will return to Freeport after October 3 (suspended due to the hurricane season) with daily service and will ramp up its Miami-Freeport offerings to twice daily in November. Bahamasair is also launching a service between West Palm Beach and Freeport, beginning November 17, 2024, just in time for the high-demand Thanksgiving holiday travel.
• Overall, these will ensure continued airlift into the island, providing a significant boost to fall travel, while exploring new markets for Grand Bahama and positioning the island for returned service from both local and legacy airlines.

 (Source: Eyewitness News)

• British inflation defied forecasts for a slight fall and held at 2% in June while strong underlying price pressures prompted investors to reduce bets that the Bank of England (BoE) will cut interest rates in two weeks' time for the first time since 2020.
• Increases in hotel prices - in a month when U.S. pop star Taylor Swift and other performers toured the UK - were partly to blame for the higher-than-expected inflation number, underscoring the BoE's concern about service prices.
• Economists polled by Reuters had mostly expected headline consumer price inflation would ease to 1.9% in the 12 months to June, extending its drop from a peak of 11.1% in October 2022.
• Inflation for services was 5.7%, the Office for National Statistics (ONS) said, unchanged from May. The Reuters poll had pointed to a slightly weaker 5.6% increase.
• The BoE took comfort from May's fall in consumer price inflation to its 2% target for the first time in nearly three years. But it has expressed concern about the strength of services inflation, which largely reflects pressure from wage growth in a labour market short of candidates to fill jobs.
• Core inflation - excluding volatile food and energy prices - held at 3.5% in the 12 months to June, the ONS said, matching the median forecast in the Reuters poll. The BoE had expected headline inflation of 2.0% in June and services inflation of 5.1%, according to forecasts it published two months ago. The BoE also expected headline inflation to rise back above its target later this year and through 2025.

(Source: Reuters)

• Production at U.S. factories increased more than expected in June, contributing to a solid rebound in output in the second quarter, though higher borrowing costs remain a constraint for the manufacturing industry.
• Factory output rose 0.4% last month following an upwardly revised 1.0% increase in May, the Federal Reserve said on Wednesday. Economists polled by Reuters forecast factory output would advance 0.2% after a previously reported 0.9% jump in May. Factory Production shot up 1.1% on a year-on-year (YoY) basis in June.
• It increased at a 3.4% annualised rate in the second quarter, rebounding from the 1.3% pace of decline in the January-March quarter.
• Manufacturing, which accounts for 10.4% of the economy, has at best been treading water as higher interest rates curb demand for goods and make capital investment challenging.
• Motor vehicle and parts output rose 1.6% last month after being unchanged in May while durable goods manufacturing production was unchanged. Increases in the output of motor vehicles and parts as well as electrical equipment, appliances and components were offset by declines in fabricated metal products and miscellaneous goods.
• Mining output rose 0.3% after falling 0.7% in May. Utilities production increased 2.8% following a 1.9% rise in the prior month. Overall industrial production advanced 0.6% in June after gaining 0.9% in May.
• Capacity utilisation for the industrial sector, a measure of how fully firms are using their resources, rose to 78.8% from 78.3% in May. It is nine-tenths of a percentage point below its 1972–2023 average. The operating rate for the manufacturing sector climbed to 77.9 from 77.6% in the prior month. It is four-tenths of a percentage point below its long-run average.

(Source: Reuters)

• Access Financial Services Limited (AFS) has advised that Executive Chairman, Mr. Marcus James requested a one-year leave of absence from his role effective June 27, 2024. During this period, Mr. James will continue to serve on the Board.
• Mr. Michael Shaw was subsequently appointed as the new Chairman of the Board. Mr. Shaw brings extensive leadership experience in the financial sector. He served in senior positions where he consistently exceeded targets, improved efficiency, and delivered strong financial results.
• Additionally, the AFS Board appointed Mrs. Charmaine Boyd-Walker as the Chairman of the Audit & Risk Management Committee. Mrs. Boyd-Walker has over 25 years of experience in accounting and finance, with significant expertise in audit and accounting standards, internal controls, compliance, and risk management.
• AFS’ stock has declined 13.1% since the start of the calendar year and closed at $21.73 on Tuesday, July 16^th. At this price, the stock currently trades at a P/B of 2.0x earnings, which is below the Junior Market Financial Sector average of 2.7x.

(Sources: JSE & NCBCM Research)

• Prime Minister, the Most Hon. Andrew Holness, has highlighted the need for Negril to have its own local authority, which will enable the town to manage its affairs better.
• The Prime Minister, who was speaking to members of the Negril business community and other stakeholders on July 12, said the resort town outgrew its current governance structure, posing challenges both to infrastructure and administration.
• He stated that due to the growth and expansion of Negril, the town has crossed over from Westmoreland into Hanover, leaving the question as to who is in charge.
• Mr. Holness said that while there have been discussions on the matter in the past, it was time to give Negril its own Municipality.
• “Where the problem lies is where the solution should be. If the proper structure is put in place, I am convinced you could see an improvement in how the town is managed… Negril has also outgrown not only its physical infrastructure but its management structure,” Mr. Holness further noted.

(Source: JIS)