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Prospects Daily: U.K. leading economic index improves, Mexico’s central bank keeps key interest rate unchanged in July

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High Income Economies
 
Canada lost 9400 jobs in June and the jobless rate rose by 0.1 percentage points to 7.1% percent, as more people were searching for work.  Employment increased by 72,000 annually or 0.4% (y/y), the lowest since February 2010.  Employment fell in business, building and other support services as well as agriculture. At the same time, there were more people working in construction and other services.
 
Coming in at 111.0, the Conference Board leading economic index for the U.K. rose 0.5% (m/m) in May, the same as in April. Six among the seven sub-indices contributed positively to the rise in the overall index.  Meanwhile, the coincident economic index, measuring current economic activity, came in at 106.9 unchanged from May, following a 0.3% increase in both April and March.
 
Showing the first drop in four months, the Conference Board leading economic index for South Korea declined 0.6% in May, following a 1.0% increase in April. Out of the seven components, four of them contributed positively to the index. Meanwhile, a large negative contribution from the value of machinery orders component dragged the indicator.  The coincident economic index, which measures current economic activity, also decreased 0.5% in May, following a 0.1% drop in April.  Taken together, the decline in the two indicators suggests that economic growth is unlikely to pick up in the near term.
 
Developing Economies
 
Europe and Central Asia  
Turkey’s current account deficit narrowed more-than-expected to US$3.43bn in May, down from US$4.82bn in April. Economists’ forecast was for the current account deficit to decline to US$4.0bn. In the five months to May, the current account deficit decreased to US$19.8bn from US$32.27bn in the same period the previous year.
 
Latin America and Caribbean  
At its meeting of July 11th 2014, Mexico’s central bank decided to leave the benchmark interest rate unchanged at the record low 3.0%, following a cut of 50 basis points in June, in line with expectations, citing a lack of clear signs of recovery in domestic spending amid a favorable inflation outlook.
 
Meanwhile, Mexico’s industrial production rebounded in May but at a slower-than-expected pace, rising 1.6% (y/y) after falling 0.8% (y/y) in April. Economists’ forecast was for industrial production to expand by 1.9% (y/y). Manufacturing output rose at a faster-than-expected 3.6% (y/y) pace, utility sector output grew 1.0%, slower-than-expected, while mining and construction output fell. On a monthly basis, industrial production rose 0.11%.
 
South Asia  
India’s industrial production grew 4.7% (y/y) in May, faster than the 3.4% (y/y) growth recorded in April, beating expectations.  Manufacturing production accelerated, rising 4.8% (y/y) following a 2.6% (y/y) increase in April, and electricity production grew 6.3% (y/y) while mining output rose 2.7% (y/y).  In April to May, industrial production grew 4.0% (y/y) from the same period in the previous year.

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