The Federal Reserve last Wednesday opted not to raise interest rates, despite painting a rosier economic picture than it did just a month ago.
The Fed kept its benchmark overnight interest rate in a range of 0.25 per cent and 0.5 per cent.
In a statement, the US central bank noted that job gains were strong and that other economic indicators were pointing to growth. It also said that inflation remains mired and is “expected to remain low in the near term”.
It gave no signal as to whether it would increase interest rates in the next policy meeting in September.
The decision to leave rates unchanged was not unanimous.
In the meantime, according to the UK’s Office for National Statistics, the country’s GDP growth picked up at a faster pace in the second quarter of 2016 amidst the ‘Brexit’ vote.
GDP increased by 0.6 per cent in the three months to June compared to the previous three months. This exceeded economists’ forecasts of 0.5 per cent growth and the first quarter expansion rate of 0.4 per cent.
On the production side, a 2.1 per cent increase in production was posted and a 0.5 per cent expansion was seen in the services sector.
On the other hand, a fall of one per cent was seen in the agriculture sector and a 0.4 per cent loss in the construction sector.
Compared to the second quarter of last year, GDP growth in the second quarter rose to 2.2 per cent, which exceeded the anticipated growth of 2.1 per cent.
Finally in the US, the German Federal Labour Agency reported last week that German unemployment declined in July and that the jobless rate held steady at a record low.
The seasonally adjusted jobless fell by 7,000 from June to 2.68 million in July. This drop exceeded economists’ forecasts of 4,000.
The jobless rate remained at 6.1 per cent in July, the lowest since the German reunification in 1990.
The unemployment rate was also stable following a slight decline in May, according to the labour survey.
This report was compiled by Bank of Valletta plc for general information purposes only.