I want to share this article which updates the latest economic news in the United States, Eurozone, Canada, and China.
American personal income decreased sharply in August because the stimulus package from the government expired in July. I think citizens did not have enough money to spend on living, they had to spend what they saved before, so total savings declined. Expenses rose a little maybe due to the higher cost of living in the COVID-19 pandemic. But they spent more on goods, not on services, I think this was partly because many stores that provided services closed and goods were more necessary than services for living. More people buy houses recently because mortgage rates are grossly low and short-term fed funds rates keep almost 0% which removes inflationary pressure.
Eurozone is facing disinflationary or even deflationary pressures since the value of the euro has been increasing against the US dollar. So the real (inflation-adjusted) interest rates become higher, which harms the credit market.
The Canadian economy is recovering slowly. Some businesses in Quebec will have to close briefly or reduce services to slow the spread of the coronavirus.
The COVID-19 pandemic in China started at the end of December of 2019 and was controlled at the beginning of March. So the economy in China recovered from March and the coronavirus had not impacted the Chinese economy much from then on. Everything in China was moving back to the normal track since March. Recently, China is solving the climate change problem by reducing carbon emissions and utilizing electric vehicles. Green energy would generate investments that develop productivity, so it might even increase economic growth.
Overall, the global economy is hurt badly by the COVID-19 pandemic and the economic recovery speed in China is the fastest. From my point of view, the economy will really recover only after the pandemic is under control. Saving lives is more important than growing economy if we can’t have both at the same time.
Kalish, I., 2020. Weekly Global Economic Update. [online] Deloitte Insights. Available at: <https://www2.deloitte.com/us/en/insights/economy/global-economic-outlook/weekly-update.html> [Accessed 10 October 2020].