Macro Snapshot — French unemployment slips to 14-year low; US retail sales increase strongly

Britain’s unemployment rate fell to its lowest since 1974 at 3.7 percent in the first three months of this year. Reuters/File
Britain’s unemployment rate fell to its lowest since 1974 at 3.7 percent in the first three months of this year. Reuters/File
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Updated 17 May 2022

Macro Snapshot — French unemployment slips to 14-year low; US retail sales increase strongly

Macro Snapshot — French unemployment slips to 14-year low; US retail sales increase strongly

RIYADH: Unemployment in France and Britain fell to their lowest since 2008 and 1974 respectively, whereas the Dutch economy recorded no growth as consumption levels dropped. 

French unemployment slips

Unemployment in France dipped slightly in the first quarter to the lowest rate in 14 years, official data showed on Tuesday, giving President Emmanuel Macron a boost ahead of legislative elections.

The unemployment rate slipped to 7.3 percent from 7.4 percent in the previous three months, the INSEE statistics agency said. A Reuters poll of 10 economists had on average expected the rate to remain unchanged.

It was the lowest level of unemployment since the second quarter of 2008, apart from an anomalous, unrepresentative drop at the start of the pandemic when job seekers could not look for work during a nationwide lockdown.

Apart from during that period, unemployment has come down steadily since Macron first took office in 2017, when the jobless rate stood at 9.5 percent.

Beyond the headline decrease in joblessness, INSEE’s quarterly employment report showed that youth unemployment rose to 16.3 percent from 16.0 percent in the final quarter of last year, when it hit the lowest level since early 1981.

Meanwhile, the employment rate, the share of the workforce in work, rose to 68 percent from 67.8 percent in the previous quarter, reaching the highest level since INSEE began keeping records in 1975.

UK unemployment falls to lowest

Britain’s unemployment rate fell to its lowest since 1974 at 3.7 percent in the first three months of this year, official figures showed on Tuesday, below economists’ forecasts for it to hold steady at 3.8 percent.

Average earnings, excluding bonuses, were 4.2 percent higher than a year earlier in the three months to March, above the average forecast in a Reuters poll for wage growth to hold at 4.1 percent.

Turkish house sales rise 

Turkish house sales rose 38.8 percent in April on the year to 133,058 houses, data from the Turkish Statistical Institute showed on Tuesday, with more than double the houses sold to Russians compared to a month ago as they sought a financial haven.

Sales to foreigners rose 58.1 percent, the institute said. Russian citizens rose to the top of the list in April with 1,152 houses from 547 in March. They were followed by Iranians and Iraqis.

Wealthy Russians are pouring money into real estate in Turkey and the UAE, seeking a financial haven in the wake of Moscow’s invasion of Ukraine and Western sanctions, many property companies say. 

The data also showed April mortgaged sales rose 82.9 percent from a year earlier to 32,030, accounting for 24.1 percent of the total sales in the period.

Dutch Q1 economic growth 

Growth of the Dutch economy stalled in the first three months of 2022, as consumer and government spending dropped compared with the previous quarter, a first estimate released on Tuesday showed.

The first quarter gross domestic product was unchanged from the last three months of 2021.

Nonetheless, the eurozone’s fifth largest economy was 7 percent larger than it had been in the same period a year earlier, when demand was crippled by a broad COVID-19 lockdown.

Economists on average had expected quarterly growth of 0.2 percent.

Government spending fell 4 percent in the first quarter, while consumer spending was 0.1 percent lower.

Indonesia posts trade surplus 

Indonesia’s trade surplus jumped to its largest ever at $7.56 billion in April, as exports rose to a record high while imports grew slower than expected, data from the statistics bureau showed on Tuesday.

Indonesia, a major exporter of many commodities such as thermal coal, palm oil and nickel, has reported a trade surplus every month in the past two years, enjoying an export boom and rising prices of commodities.

A Reuters poll had expected a trade surplus of $3.25 billion for April, following a $4.53 billion surplus the previous month.

Spain’s March trade deficit soars 

Spain’s trade deficit jumped 11-fold in March compared to the same month a year earlier to €4.64 billion ($4.86 billion), the Industry Ministry said on Tuesday.

Exports rose 17 percent to €33 billion, while imports increased 32 percent to €37.3 billion, the ministry said.

India’s WPI inflation  

India’s wholesale prices accelerated at the fastest pace in at least 17 years as the Ukraine war and a weak rupee pushed up energy and raw material costs, raising risks for businesses that are unable to pass on costs.

While big retailers, food makers and consumer product companies including Hindustan Unilever, Britania and Procter & Gamble are passing along higher costs to consumers, small companies are finding it hard to raise prices, industry leaders said.

Annual wholesale price inflation, a proxy for producers’ prices, climbed to 15.08 percent in April, remaining in double-digits for the 13th month in a row, and higher than 14.48 percent forecast in a Reuters poll of analysts.

Wholesale prices are at the highest since at least April 2005, according to Refinitiv data. Some private economists said WPI inflation in April was the highest since 1991, according to an earlier series.

Economists said that with wholesale inflation picking up along with retail inflation at 7.79 percent in April — an eight-year high — the central bank was likely to push for aggressive rate hikes to tame prices. Higher rates will pose a drag on economic growth as well, they said.

“With WPI inflation remaining solidly in double-digits, the probability of a repo hike in the June 2022 review of monetary policy has risen further,” said Aditi Nayar, chief economist at ICRA, the Indian arm of ratings agency Moody’s.

US retail sales increase 

US retail sales increased solidly in April as consumers bought motor vehicles amid an improvement in supply and frequented restaurants, showing no signs of demand letting up despite high inflation.

Retail sales rose 0.9 percent last month, the Commerce Department said on Tuesday. Data for March was revised higher to show sales advancing 1.4 percent instead of 0.7 percent as previously reported.

Economists polled by Reuters had forecast retail sales accelerating 0.9 percent, with estimates ranging from as low as 0.2 percent to as high as 2.0 percent. Last month’s increase reflects both strong demand and higher prices.

Retail sales are mostly goods, and are not adjusted for inflation, which appears to have peaked in April. Bars and restaurants are the only services category in the report.

 

(With input from Reuters) 


Stuck bags add to tangles at Paris airports amid travel boom

Stuck bags add to tangles at Paris airports amid travel boom
Updated 58 min 13 sec ago

Stuck bags add to tangles at Paris airports amid travel boom

Stuck bags add to tangles at Paris airports amid travel boom
  • Union activists said many more passengers flew without their bags
  • The scene at Charles de Gaulle on Saturday was busy but typical for the first weekend in July

PARIS: Airlines worked Saturday to deliver luggage to passengers around the world after a technical breakdown left at least 1,500 bags stuck at Paris’ Charles de Gaulle airport, the latest of several tangles hitting travelers this summer.
The airport’s baggage sorting system had a technical malfunction Friday that caused 15 flights to depart without luggage, leaving about 1,500 bags on the ground, according to the airport operating company. The airport handled about 1,300 flights overall Friday, the operator said.
Union activists said many more passengers flew without their bags, apparently because of knock-on effects from the original breakdown.
It came as airport workers are on strike at French airports to demand more hiring and more pay to keep up with high global inflation. Because of the strike, aviation authorities canceled 17 percent of flights out of the Paris airports Friday morning, and another 14 percent were canceled Saturday.
Passengers on canceled flights were alerted days ahead of their flights. The scene at Charles de Gaulle on Saturday was busy but typical for the first weekend in July, when France’s summer travel season kicks off.
Unions plan to continue striking Sunday but no flights have been canceled so far. They have threatened to renew the strike next weekend if negotiations with company management don’t succeed in finding a compromise.
Until now, French airports had been largely spared the chaos seen recently at airports in London, Amsterdam and some other European and US cities. Airlines and airports that slashed jobs during the depths of the COVID-19 crisis are struggling to keep up with soaring demand as travel resurges after two years of virus restrictions.


Oil prices up 2 percent on supply outages

Oil prices up 2 percent on supply outages
Updated 01 July 2022

Oil prices up 2 percent on supply outages

Oil prices up 2 percent on supply outages

LONDON: Oil prices rose about 2 percent on Friday, recouping most of the previous session’s declines, as supply outages in Libya and expected shutdowns in Norway outweighed expectations that an economic slowdown could dent demand, according to Reuters.

Brent crude futures were up $2.20, or 2 percent, at $111.23 a barrel by 1348 GMT, having dropped to $108.03 a barrel earlier in the session.

WTI crude futures gained $2.25, or 2.1 percent, to $108.01 a barrel, after retreating to $104.56 a barrel earlier.

Both contracts fell around 3 percent on Thursday, ending the month lower for the first time since November.

We “still see risks to prices as skewed to the upside on tight inventories, limited spare capacity and muted non-OPEC+ supply response,” Barclays said in a note.

Libya’s National Oil Corporation declared force majeure on Thursday at the Es Sider and Ras Lanuf ports as well as the El Feel oilfield. Force majeure is still in effect at the ports of Brega and Zueitina, NOC said.

Production has seen a sharp decline, with daily exports ranging between 365,000 and 409,000 bpd, a decrease of 865,000 bpd compared to production in “normal circumstances,” NOC said.

Elsewhere, 74 Norwegian offshore oil workers at Equinor’s Gudrun, Oseberg South and Oseberg East platforms will go on strike from July 5, the Lederne trade union said on Thursday, likely halting about 4 percent of Norway’s oil production.

Ecuador’s government and indigenous groups’ leaders on Thursday reached an agreement to end more than two weeks of protests which had led to the shut-in of more than half of the country’s pre-crisis 500,000 bpd oil output.

On Thursday, the OPEC+ group of producers, including Russia, agreed to stick to its output strategy after two days of meetings. However, the producer club avoided discussing policy from September onwards.

Previously, OPEC+ decided to increase output each month by 648,000 barrels per day in July and August, up from a previous plan to add 432,000 bpd per month.

US President Joe Biden will make a three-stop trip to the Middle East in mid-July that includes a visit to Saudi Arabia, pushing energy policy into the spotlight as the United States and other countries face soaring fuel prices that are driving up inflation.

Biden said on Thursday he would not directly press Saudi Arabia to increase oil output to curb soaring prices when he sees the Saudi king and crown prince during a visit this month.

A Reuters survey found that OPEC pumped 28.52 million bpd in June, down 100,000 bpd from May’s revised total.

Oil prices are expected to stay above $100 a barrel this year as Europe and other regions struggle to wean themselves off Russian supply, a Reuters poll showed on Thursday, though economic risks could slow the climb.

India introduced export duties on gasoil, gasoline and jet fuel on Friday to help maintain domestic supplies, while also imposing a windfall tax on oil producers who have benefited from higher global crude oil prices. 


Russia seizes control of partly foreign-owned energy project

Russia seizes control of partly foreign-owned energy project
Updated 01 July 2022

Russia seizes control of partly foreign-owned energy project

Russia seizes control of partly foreign-owned energy project

MOSCOW: Russian President Vladimir Putin has handed full control over a major oil and natural gas project partly owned by Shell and two Japanese companies to a newly created Russian firm, a bold move amid spiraling tensions with the West over Moscow’s military action in Ukraine, according to Associated Press.

Putin’s decree late Thursday orders the creation of a new company that would take over ownership of Sakhalin Energy Investment Co., which is nearly 50 percent controlled by British energy giant Shell and Japan-based Mitsui and Mitsubishi.

Putin’s order named “threats to Russia’s national interests and its economic security” as the reason for the move at Sakhalin-2, one of the world’s largest export-oriented oil and natural gas projects.

The presidential order gives the foreign firms a month to decide if they want to retain the same shares in the new company.

Russian state-controlled natural gas giant Gazprom had a controlling stake in Sakhalin-2, the country’s first offshore gas project that accounts for about 4 percent of the world’s market for liquefied natural gas, or LNG. Japan, South Korea and China are the main customers for the project’s oil and LNG exports.

Kremlin spokesman Dmitry Peskov said Friday that there is no reason to expect a shutdown of supplies following Putin’s order.

Shell held a 27.5 percent stake in the project. After the start of the Russian military action in Ukraine, Shell announced its decision to pull out of all of its Russian investments, a move that it said has cost at least $5 billion. The company also holds 50 percent stakes in two other joint ventures with Gazprom to develop oil fields.

Shell said Friday that it’s studying Putin’s order, which has thrown its investment in the joint venture into doubt.

“As a shareholder, Shell has always acted in the best interests of Sakhalin-2 and in accordance with all applicable legal requirements,” the company said in a statement. “We are aware of the decree and are assessing its implications.”

Seiji Kihara, deputy chief secretary of the Japanese cabinet, said the government was aware of Putin’s decree and was reviewing its impact. Japan-based Mitsui owns 12.5 percent of the project, and Mitsubishi holds 10 percent.

Kihara emphasized that the project should not be undermined because it “is pertinent to Japan’s energy security,” adding that “anything that harms our resource rights is unacceptable.”

“We are scrutinizing Russia’s intentions and the background behind this,” he told reporters Friday at a twice-daily news briefing. “We are looking into the details, and for future steps, I don’t have any prediction for you at this point.”

Asked during a conference call with reporters if Putin’s move with Sakhalin-2 could herald a similar action against other joint ventures involving foreign shareholders, Peskov said, “There can’t be any general rule here.”

He added that “each case will be considered separately.”

Sakhalin-2 includes three offshore platforms, an onshore processing facility, 300 kilometers of offshore pipelines, 1,600 kilometers of onshore pipelines, an oil export terminal and an LNG plant.
 

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Riyadh no longer one of the 100 most expensive cities for expats: Mercer

Riyadh no longer one of the 100 most expensive cities for expats: Mercer
Updated 01 July 2022

Riyadh no longer one of the 100 most expensive cities for expats: Mercer

Riyadh no longer one of the 100 most expensive cities for expats: Mercer

RIYADH: Saudi Arabia’s capital, Riyadh, has dropped 72 places in a ranking of the world’s most expensive cities for expats as it tumbled out of the top 100, according to a report issued by Mercer.

Riyadh was positioned at 103 in Mercer's Cost of Living Index 2022, falling from 29 in the previous year’s list. 

Commenting on Riyadh’s fall, Khaled Al-Mobayed, CEO of Menassat Reality Co., a Riyadh-based real estate developer, said: “The results came in contrary to the expectations, due to the pandemic’s ongoing consequences and the rising cost of logistics and supply chain.”

“Being out of the 100 top expensive cities is a good sign despite the challenges that the economy has gone through,” he added.

UAE's Dubai took over Lebanon's capital, Beirut, as the most expensive city among Arab countries in the region, ranking 31.

Despite being placed third in 2021, Beirut was not even on this year’s list of 227 cities due to the country’s economic turmoil.

The city’s fall reflects the severe drop in value of the Lebanese pound, according to Lebanese economic analyst Bassel Al-Khatib, who pointed out the minimum wage is now worth $20, while it was $450 before the economic crisis gripping the country. 

“Lebanon is extremely expensive to those who get paid in Lebanese pounds yet very cheap for those who get pain in US dollars,” he told Arab News, adding: “Lebanon was expensive for both citizens and foreigners, and with the currency dropping 95 percent and the dollar reaching record levels, the situation changed.”

“Everything has become expensive but not for foreigners who have dollars. All services by the government such as water, electricity fees, or internet are still the same but food prices skyrocketed,” he added.

Abu Dhabi was the second highest Arab city from the region, ranked at 61, while Jeddah came in at 111 this year compared to 94 in 2021.

Jordan's capital Amman ranked 115, followed by Bahrain's Manama at 117, Oman's Muscat at 119 and Kuwait city at 131.

Egypt's capital, Cairo, was placed at 154 while Rabat, Algiers and Tunis came as the least expensive in the region, ranking 162, 218 and 220 respectively.

Hong Kong topped the list as the most expensive city in the world in 2022, moving from second rank last year and taking the top spot from Turkmenistan’s capital, Ashgabat.

Switzerland’s Zurikh and Geneva followed as second and third most expensive cities, replacing Hong Kong and Beirut respectively.

Turkey’s capital, Ankara, came in as the least expensive city, ranking 227, taking the spot from Kyrgyzstan’s capital Bishkek.


France eyes ‘good investment opportunities’ in Saudi Arabia: Official

France eyes ‘good investment opportunities’ in Saudi Arabia: Official
Updated 01 July 2022

France eyes ‘good investment opportunities’ in Saudi Arabia: Official

France eyes ‘good investment opportunities’ in Saudi Arabia: Official

RIYADH: France is intensifying efforts to take advantage of Saudi investment opportunities in all sectors, mostly energy, technology, water and other industrial services, the country's Ambassador in Saudi Arabia said.

Saudi Arabia is an attractive region and a suitable environment for investments in all its vital sectors, Ludovic Pouille told a press conference.

The French government and the private sector are working to expand the number of companies operating in the Kingdom, which currently stands at about 135, Aleqtisadiah reported citing Pouille.

The aim is to gain large investment spaces, and to benefit from the reforms and economic developments undertaken by Saudi Arabia, which constitute a good opportunity for French companies, he said. 

The French ambassador said France will take the model of agreements between the Al-Ula Authority and his country’s institutions in the fields of infrastructure and culture, as a starting point for expanding the map of investments in the future.