Surge in US jobless claims amid falling inflation and other economy stories to read this week

US inflation has fallen for the sixth consecutive month. The headline figure dropped to 2.4% in September - slightly above economists' predictions of 2.3%, but below August’s 2.5% - while unemployment claims have jumped, data from the Bureau of Labor Statistics shows.

This cements expectations that the Federal Reserve will cut interest rates by 0.25% at its November meeting, according to the Financial Times (FT). Following the data, investors priced in a 90% chance of a rate cut, up from 80%.

Core inflation, excluding food and energy, rose to 3.3%, above the anticipated 3,2%, driven by a rebound in the prices of used cars and trucks, according to Reuters.

However, September consumer prices increased, with the consumer price index (CPI) rising 0.3%, the same as in August, indicating some inflation persistence.

State unemployment claims for the period also rose - by 33,000 to 258,000 for the week ending 5 October, well above the projected 230,000.

North Carolina, Florida, and Washington saw significant increases, with Hurricane Helene impacting the data. Further distortions are expected as Hurricane Milton continues to disrupt the labour market.

Speculating on the road ahead for the US economy, a financial strategist told the FT: "The easy gains in disinflation are well behind us, and from here, it’s likely to be a little bit bumpier path."

The Bank of Japan (BoJ) could consider raising interest rates if there is "greater confidence" in its economic and price forecasts - a move garnering growing support from analysts, according to Reuters.

This comes on the heels of "significantly dovish rhetoric" from BoJ Governor Kazuo Ueda and unexpected opposition to rate hikes from new Prime Minister Shigeru Ishiba, casting doubt on the timing of the next policy tightening.

Speaking at a seminar, Deputy Governor Ryozo Himino emphasized the BoJ would assess the "totality" of data at each policy meeting, noting, "we are not on a pre-set course".

He highlighted that US and Chinese consumer data, as well as Japan's wage trends and exchange rate effects, will play a key role in future decisions.

Despite the recently cautious economic mood, sources and analysts increasingly believe the BoJ should raise interest rates further from historic lows and enhance its hawkish stance.

While it is expected to keep rates steady at its 30-31 October meeting, the BoJ will likely maintain its forecast for inflation to remain around its 2% target through March 2027, three sources "familiar with its thinking" told Reuters.

Britain's economy grew by 0.2% in August, ending two months of stagnation and easing pressure on finance minister Rachel Reeves ahead of the Labour government's first budget. All major sectors contributed to the growth, despite weaker performance in services.

This comes as Britain's housing market showed improvement in September, with the Royal Institution of Chartered Surveyors reporting a house price balance of +11, its first positive reading since October 2022. Despite rising house prices, rental sector pressure increased as tenant demand outstripped available homes.

The global economy could incur losses of $14.5 trillion over five years from a hypothetical geopolitical conflict disrupting supply chains, according to Lloyd's of London. The insurer highlighted that existing wars in Ukraine and Gaza have already impacted key shipping routes. With over 80% of global trade transported by sea, the closure of major trade lanes poses a significant risk to economic resilience.

China's exports are projected to have risen 6.0% year-on-year in September, marking the slowest growth in five months as manufacturers ease order shipments amid softening global demand. Inbound shipments are expected to increase by 0.9%, offering some encouragement to policymakers aiming to boost domestic demand.

Argentina's monthly price hikes slowed to 3.5% in September, the lowest since late 2021, but annual inflation remains at 209% - one of the highest globally. Despite this slight easing, stagnant salaries provide little relief for workers, with inflation projected to end 2024 at 124%.

Greece's central bank governor, Yannis Stournaras, believes inflation in the Eurozone may reach the European Central Bank's 2% target by mid-2025, prompting calls for faster interest rate cuts, reports the FT. He supports two quarter-point reductions this year - one at next week’s ECB meeting and another in December - due to weaker economic data. He noted that even after these cuts, rates would remain restrictive at 3%.

Brazil's retail sales volumes fell 0.3% in August, less than the 0.5% decline forecasted by economists, according to government agency IBGE. This marks only the second monthly drop in 2024, following a 0.6% increase in July.

India's retail inflation in September is likely to exceed the Reserve Bank of India's 4% target for the first time since July, fuelled by rising vegetable prices and a lower year-ago base, according to a Reuters poll. The 48 economists surveyed predict it will reach 5.04%, up from 3.65% in August, as measured by the CPI. The official figures will be released on 14 October at 1200 GMT.

Antimicrobial resistance could cause 10 million deaths and $100 trillion in costs by 2050. Innovative financing models are crucial for tackling this crisis. Learn how public-private partnerships and hybrid funding strategies can reinvigorate the antibiotic pipeline and support global health initiatives.

The Eurozone's household saving rate rose to 15.7% in Q2 2024, exceeding pre-pandemic levels and signalling increased economic anxiety. According to the World Economic Forum's Chief Economists Outlook, this trend reflects low consumer confidence and weak growth expectations, not least in Germany and France. Spencer Feingold, Digital Editor at the World Economic Forum, outlines these critical findings and their implications for Europe's economic landscape.

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