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Prospects Daily: U.K. unemployment lowest since 2008, China’s GDP growth at 7.5% in Q2

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High Income Economies

With energy prices showing a significant rebound, U.S. producer prices increased by more than expected in June. The producer price index for final demand rose by 0.4% (m/m) following a 0.2% drop in May. Economists had expected prices to increase by about 0.2%. Excluding food and energy prices, core producer prices edged up by 0.2% in June after dipping by 0.1% in May.

The U.K. ILO unemployment rate for March to May fell to 6.5%, the lowest since Q4 2008. The latest reading matched economists' expectations, and is lower than the 6.9% seen in December to February, and the 7.8% in the same period last year. During March to May, there were 2.12 million unemployed, 121,000 fewer than from December to February. At the same time, the number of people in work surged 254,000 from February to 30.6 million, the highest on record.

The South Korean unemployment rate decreased to a seasonally adjusted 3.6% in June from 3.7% in May, while the participation rate increased to 63.1% from 63.0%. The number of employed people grew by an unadjusted 398,000 over the year to 25,875 in June. Most of the industries, including manufacturing, health and social welfare, hotels and restaurants, education and information services recorded an increase in job creation in June.

Developing Economies

East Asia and Pacific

China’s GDP grew by 7.5% (y/y) in the second quarter of 2014, slightly faster than economists’ forecast of 7.4% growth, boosted by stimulus measures launched by the government. Quarter-on-quarter, GDP grew 2.0% in Q2, strengthening from Q1’s 1.5% (q/q) expansion.

In June, China’s industrial production grew 9.2% (y/y), its fastest growth in the year, accelerating from 8.8% (y/y) in May, while retail sales growth remained stable at 12.4% (y/y) almost unchanged from 12.5% in May. Also, in the first six months of the year, urban fixed asset investment grew by 17.3% following a 17.2% increase in the January-May period.

South Asia

India’s exports grew at a robust 10.2% (y/y) pace in June, beating expectations, but slower than the 12.4% (y/y) growth recorded in May. Meanwhile imports grew by 8.3%, rebounding from an 11.4% (y/y) decline in May. As a result, the trade deficit widened to US$11.76bn in June from US$11.28bn last year.

Sub-Saharan Africa

Nigeria’s GDP grew at 6.21% (y/y) in the first quarter of 2014, slower than the 6.77% growth recorded in the fourth quarter of 2013, driven mainly by the services sector while the oil sector contracted. Meanwhile,

Nigeria’s annual consumer price inflation rose to a 10-month high 8.2% (y/y) in June up from 8.0% in May due to higher food prices, but remained within the central bank’s target range of 6%-9% for 2014.