• The repair bill for the 362 schools damaged by Hurricane Beryl in July has exceeded $3Bn. Preliminary estimates to undertake repairs were priced at $2.7Bn. The disclosure was made by Minister of Education and Youth, Hon. Fayval Williams, during Wednesday’s (August 28) post-Cabinet press briefing at Jamaica House.
• “Given that the number of schools assessed has increased, that figure would increase. More money will be required as we go through the school year. It’s now over $3 billion,” said Minister Williams.
• Of the 362 schools, 107 were severely damaged, 139 were classified as moderately damaged, while 116 received minor damage.
• Mrs. Williams said the Ministry has a better assessment now than it did in the immediate aftermath of Hurricane Beryl and will need to tap into the Supplementary budget. “We have to present the case to the Ministry of Finance and the Public Service, and on our side, we have to be efficient with the funds that were allocated to us, because it’s an additional burden on the national budget as a result of the hurricane,” Minister Williams said.
• She noted that the contractors are working in earnest to meet the September 2 deadline. “They are really pushing to ensure that they complete the work… For September 2, will the schools be at 100 percent? Maybe not, but they are saying what’s left to be done will not impact the opening of school,” the Minister said.

(Source: JIS)

• The Central Bank of the Dominican Republic (BCRD) has released preliminary economic activity results for July 2024. The monthly indicator of economic activity (IMAE) showed a 4.8% expansion for the month, with an average year-on-year growth of 5.0% over the first seven months of the year.
• Hotels, bars, and restaurants saw an 8.0% increase during this period, largely driven by the arrival of 5,286,325 tourists by air in the first seven months. While the sector had a 9.3% growth in July 2023, the 3.8% increase in July 2024 compared to the same month last year reflects a base effect from the previous year.
• July 2024 set a record for the highest number of non-resident air passengers for that month, with 811,192 arrivals. The year is expected to end with approximately 8.6 million tourists entering the country through various airports.
• This performance occurs in the context of price stability, supported by effective monetary and fiscal policies that have mitigated risks to the Dominican economy.

(Source: Dominican Today)

• The Bank of Mexico cut its forecast for economic growth this year and next, according to the central bank's quarterly report on Wednesday, August 28, citing weaker foreign manufacturing demand, while inflation remains stubborn.
• The central bank for Latin America's No. 2 economy now expects 2024 gross domestic product growth of 1.5%, down from a previous forecast of 2.4% and 1.2% growth in 2025 from a prior forecast of 1.5%.
• Banxico, as the central bank is known, said it had reduced this forecast due to weaker-than-expected second-quarter growth, noting external demand should remain soft due to expected weakness in U.S. manufacturing as well as fewer public infrastructure projects boosting domestic construction.
• Official statistics showed that Mexico's GDP expanded 0.2% in the second quarter from the previous three months, reinforcing a slowdown trend seen since late last year.
• Furthermore, the monetary authority raised its inflation forecasts and said it sees the balance of risks regarding inflation as biased to the upside after previously regarding this as balanced. However, it maintained its forecast that both inflation metrics should converge toward its 3% target by the fourth quarter of next year.
• The bank said in its report it expects the inflationary environment to allow discussion of further cuts to the benchmark interest rate. Earlier this month, Banxico lowered its benchmark interest rate by 25 basis points to 10.75% in a divided vote, signalling that prices could still rise higher than previously expected.

 (Source: Reuters)

• The U.S. economy grew faster than initially thought in the second quarter amid strong consumer spending, while corporate profits rebounded, which should help to sustain the expansion.
• Gross domestic product (GDP) increased at a 3.0% annualised rate last quarter, the Commerce Department's Bureau of Economic Analysis said in its second estimate of second-quarter GDP on Thursday. That was an upward revision from the 2.8% rate reported last month. The economy grew at a 1.4% pace in the first quarter. Economists polled by Reuters had forecast GDP would be unrevised at a 2.8% pace.
• Consumer spending, which accounts for more than two-thirds of the economy, increased at an upwardly revised 2.9% rate. It was previously reported to have grown at a 2.3% pace. This offset downgrades in business investment, exports, and private inventory investment.
• Spending is being supported in part by wage gains, but momentum is slowing as the labour market shifts into lower gear. Personal income increased by $233.6Bn in the second quarter, a downward revision of $4.0Bn from the previous estimate. Corporate profits, including inventory valuation and capital consumption adjustments, increased $57.6Bn after declining by $47.1Bn in the first quarter.
• Profits of domestic financial firms increased $46.4Bn, while those of non-financial institutions rose $29.2Bn, more than offsetting a $18.0Bn decline in profits from the rest of the world. When measured from the income side, the economy grew at a 1.3% rate last quarter. Gross domestic income (GDI) increased at a 1.3% pace in the January-March quarter.

(Source: Reuters)

• The number of Americans filing new applications for jobless benefits slipped last week, but re-employment opportunities for laid-off workers are becoming scarcer, a sign that the unemployment rate probably remained elevated in August.
• Though the labour market is slowing, it is doing so in an orderly fashion that is keeping the economic expansion on track. The economy grew faster than initially thought in the second quarter, powered by consumer spending, other data showed on Thursday. Corporate profits also rebounded last quarter, helping to further dispel fears of a recession.
• While the labour market slowdown positions the Federal Reserve to start cutting interest rates next month, the data argues against a 50-basis point reduction in borrowing costs.
• Initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 231,000 for the week ended Aug. 24. Economists polled by Reuters had forecast 232,000 claims for the latest week. Claims have retreated from an 11-month high in late July as distortions from temporary motor vehicle plant shutdowns for new model retooling, and the impact of Hurricane Beryl faded.
• The Labour Department's Bureau of Labor Statistics last week estimated that employment growth was overstated by 68,000 jobs per month in the 12 months through March. But most economists viewed this so-called benchmark revision estimate as misleading.
• The benchmark estimate is based on the Quarterly Census of Employment and Wages data, derived from reports by employers to the state unemployment insurance programs. The data does not include undocumented immigrants, a group that economists believe contributed to strong job growth last year.
• A step-down in hiring because of tighter monetary policy is accounting for the loss of labour market momentum, rather than layoffs. It has attracted the attention of officials at the U.S. central bank, including Fed Chair Jerome Powell who last week said, "the time has come for policy to adjust."

(Source: Reuters)

• Guyana now produces more hydrocarbons in the Caribbean region than veteran producer Trinidad and Tobago (T&T) according to recent data. Data from T&T's Ministry of Energy and Energy Industries shows oil and condensate production of 50,246 barrels per day (b/d) in the first four months of 2024. Gas production in the same period averaged almost 2.6Bn standard cubic feet per day (mscf/d) for T&T. Collectively, this amounts to approximately 484,000 barrels of oil equivalent per day (boe/d).
• Trinidad's hydrocarbon production is on a steady decline, down from approximately 719,000 boe/d in 2015. Notwithstanding, Trinidad is hoping cross-border cooperation with Venezuela brings some gas projects to fruition to help buoy its declining output, including the highly anticipated Dragon project.
• Guyana, on the other hand, started oil production in December 2019 and is experiencing significant annual increases. ExxonMobil, the sole operator with projects in production, has added an average of 98,000 b/d in the period 2020-2024.
• In the first four months of 2024, oil production averaged 616,000 b/d. Considering data for May-June, the half-year average jumps to 623,000 b/d, based on data from the Ministry of Natural Resources. While the standardised conversion of hydrocarbons into barrels of oil equivalent per day makes the comparison simple, oil and gas differ significantly in their market value, applications, and the products derived from them.
• Oil is primarily refined into fuels such as gasoline, diesel, and jet fuel, with a significant portion also used in the production of petrochemicals. Natural gas, which makes up the bulk of Trinidad's production, is in contrast predominantly used for electricity generation, heating, and as a feedstock for chemical production, including fertilisers.
• Yet, the comparison highlights a significant turning point in the Caribbean's energy landscape. Trinidad and Tobago, a veteran producer with over a century of industry experience, is now seeing its production decline as its reserves mature. Meanwhile, Guyana, having commenced production only five years ago, is experiencing an oil boom.

(Source: Trinidad Express Newspaper)

• The Bermuda Tourism Authority (BTA) released its visitor metrics for the first half of 2024, revealing significant growth in both air and cruise arrivals, alongside increased visitor spending and notable shifts in travel trends.
• According to officials, Bermuda welcomed a total of 61,619 leisure air visitors during the first six months of 2024, marking an 11.4% increase over the same period in 2023. These visitors contributed an estimated $132.3Mn to the local economy, representing a year-over-year increase of 31%, with an average spending of $2,147 per person.
• Although the average length of stay decreased slightly to 6.13 days from 6.4 days in 2023, and hotel occupancy dipped by less than 1 percentage point compared to the previous year, the island’s hotels saw a 9% increase in revenue per available room (RevPAR). This is reflected in higher spending by visitors, which continues to support the local hospitality industry.
• Cruise tourism also experienced robust growth, with Bermuda welcoming 234,790 cruise passengers in the first half of 2024, an increase of 12.3% over 2023. This influx of cruise visitors has contributed to the island’s economy, particularly for local service providers, entertainment, and the transportation sector.
• Further, the sovereign now boasts the highest number of direct routes in its history, with sixteen at the peak this summer. Air capacity to Bermuda for the first half of the year was up 28% and, for several months, exceeded the numbers seen in 2019.
• Tracy Berkeley, CEO of Bermuda Tourism Authority said, “The first half of 2024 has shown promising growth across our key tourism measures. The increase in visitor spending, the rise in air, cruise and yacht arrivals, and the rebound in leisure travel demonstrate the resilience and appeal of Bermuda as a premier destination.

 (Source: BerNews)

• Jerome Powell's Jackson Hole speech has turned Sept. 6 and Sept. 18 into the two most important dates for U.S. monetary policy in years, as events on both days center on the Fed's new guiding light: the unemployment rate. The first marks the release of the August non-farm payrolls report, and the second will see the Fed's much-anticipated interest rate decision and, just as crucially, its updated Summary of Economic Projections (SEP).
• Powell essentially made two pivots in Jackson Hole. The first, as expected, is his clear signaling that a rate cut is forthcoming. The second, perhaps less anticipated, is his equally clear emphasis that unemployment, not inflation, is now the number one determinant of upcoming policy decisions.
• However, Powell's warning that the Fed does "not seek or welcome further cooling in labor market conditions" basically means the current unemployment rate of 4.3% – which is still fairly low by historical standards – is now a "line in the sand" that, if crossed, will likely trigger a policy response.
• "The unemployment rate is now around 90% of the Fed's dual mandate, inflation is about 10%," said John Silvia, founder of Dynamic Economic Strategy, adding that Powell's pivot to unemployment from inflation is remarkable considering the economy isn't in recession.
• There's more than one way of measuring the strength or otherwise of the labor market and, by extension, the economy. They include nominal job growth, the ebb and flow of the labor force, and one of the Fed's favorites since the COVID-19 pandemic: the JOLTS estimates of outsized quits and job openings. But for the public, markets at large and politicians, the unemployment rate offers the clearest picture of how well the labor market is holding up.
• Market participants are firmly pricing in a rate cut at the Fed’s Sept. 18 meeting. Traders are currently pricing in a roughly 63.5% chance of a 25-basis-point rate cut next month, with 36.5% pricing in a 50-basis-point rate cut, according to the CME Group’s FedWatch Tool.

(Source: Reuters)

• U.S. single-family home prices fell in June, leading to the smallest annual increase in nearly a year, as higher mortgage rates pushed buyers to the sidelines and boosted housing supply.
• House prices dipped 0.1% on a month-on-month basis after being unchanged in May, the Federal Housing Finance Agency said on Tuesday. They increased 5.1% in the 12 months through June, the smallest year-on-year rise since July 2023, after advancing by an upwardly revised 5.9% in May.
• The rise in annual house prices was previously reported to have been 5.7% in May. Prices were up 0.9% in the second quarter compared to the January-March quarter. They increased 5.7% between the second quarter of 2023 and the April-June quarter this year.
• House price inflation is likely to moderate further in the months’ ahead as new housing supply has surged to levels last seen in early 2008. The existing homes inventory has also risen to the highest level in nearly four years.
• An outright decline in house prices is, however, unlikely in the absence of significant labor market deterioration. Lower mortgages, with the Federal Reserve expected to begin its interest rate cutting cycle next month, should boost demand and absorb some of the excess inventory.
• All nine census regions recorded annual house price gains in June, with big increases in the Middle Atlantic, East North Central, New England, and East South areas. Prices in the West South-Central region trailed with a 2.7% increase.

(Source: Reuters)

• United Oil & Gas Plc (AIM: "UOG"), the oil and gas company with a high impact exploration asset in Jamaica and a development asset in the UK has noted the recent rumours circulating in Jamaica media regarding its Walton Morant licence.
• United confirms that it has drilled no wells in the Walton Morant licence and therefore, no commercial oil or gas discovery has been made. United holds a 100% working interest and is currently engaged in a farm-out process. United's 2024 work programme is focused on conducting piston core sampling, which aims to detect any oil residue before considering future exploration drilling targets.
• Brian Larkin, United Chief Executive Officer, commented: "The Walton-Morant Licence is a vast exploration area containing numerous promising prospects. We are committed to improving our understanding of the resource potential within the licence area.”
• He further noted that, “We continue working to secure a strategic partner to unlock the immense potential within the licence, including recent positive interest that has been shown by several parties. Following securing an extension to the licence, our 2024 work programme is underway, and we will update the market at the next suitable opportunity."

(Source: United Oil & Gas)