US GDP grew by an annual rate of 1.7 per cent during the April-June quarter, up from an initial estimate of 1.5 per cent. In the meantime, according the Federal Reserve’s Beige Book, the economy grew “gradually” in August, with credit conditions improving but manufacturing weak.

Housing markets in all districts rose as sales and construction continued to show signs of improvement. Employment held steady or grew only marginally in most districts, while wage pressures were contained.

Meanwhile, according to the European Commission, the euro-area economic confidence, an index of executive and consumer sentiment in the 17- nation bloc, fell to 86.1 in August from 87.9 in July. This reading is a three-year low. Economists polled by a Bloomberg News survey had forecast a decline to 87.5.

The German Federal Labour Agency reported that the number of people without a job rose by 9,000 to 2.9 million on a seasonally adjusted basis. According to a Bloomberg News survey, economists predicted a 7,000 increase. This is the fifth straight monthly increase in German unemployment as the European debt crisis undermines overseas demand for German exports and companies hold back investment. The adjusted jobless rate for the month was unchanged at 6.8% – a two-decade low.

In the UK, the economy is struggling to recover from a recession and the euro-area sovereign debt crisis is undermining confidence. The Bank of England is exploring the option of expanding the monetary stimulus for the economy through so-called ‘quantitative easing’.

UK house prices faced further pressure in August as demand sagged for a second month in a row. According to Hometrack, a property research company, this was due to a ‘fragile’ market. In August, property values fell 0.1 per cent from July, when they had also fallen by the same amount.

This article was compiled by Bank of Valletta for general information purposes only.