Daijiworld Media Network - Washington

Washington, Jul 6: The global economy is displaying mixed signals as fresh US job data, a deepening manufacturing slowdown in Asia, and subdued inflation in Europe shape monetary policy trajectories across continents.

In the United States, strong public sector hiring helped job growth beat expectations in June, despite a notable slowdown in private payroll additions — the weakest since October. Healthcare remained a hiring bright spot. The unemployment rate dipped to 4.1%, reinforcing the Federal Reserve's cautious approach toward interest rate cuts, with expectations now shifting toward a possible move in the fall.

The Sun Belt's housing market is also showing signs of cooling, with a growing inventory of unsold homes and homeowners in states like Florida and Colorado exiting the market due to high insurance and mortgage burdens.

In Europe, eurozone inflation eased to the European Central Bank’s 2% target in June, bolstered by a strong euro and easing energy prices. Analysts now believe the ECB may pause its rate-cutting cycle, especially with the bloc's growth still sluggish.

The UK economy posted its best quarterly growth in a year, driven by a consumer spending spree ahead of Labour's expected tax hikes. However, that momentum is waning amid job losses, weaker exports to the US, and falling retail sales.

In Asia, warning lights are flashing as manufacturing PMIs in Taiwan, Vietnam, and Indonesia slid further into contraction. The sector faces intensified pressure with looming US tariffs threatening export-reliant economies. Japan, however, saw its biggest wage hike in 34 years, with average pay rising 5.25%, strengthening the central bank’s belief in a positive wage-price cycle.

Emerging markets showed divergent paths. Poland surprised markets by cutting interest rates again, though the central bank insists it is not launching a new easing cycle. Tanzania followed with a rate cut, while Ethiopia and the Central African bloc kept borrowing costs steady.

Elsewhere, cargo theft in Mexico rose 16% in 2024, making it the worst-hit globally in terms of economic loss ratio, according to Overhaul data. Meanwhile, US President Donald Trump threatened to maintain 25% tariffs on Japanese cars unless a trade deal is struck soon.

With uncertainty looming over global trade, central bank policies, and regional growth, the coming weeks may set the tone for economic direction in the second half of the year.