Please see below selected recent intelligence about the Americas. This is a synthesis of major recent developments at corporates, business schools, thinktanks, media, commentators, and other key influencers.
- The OECD forecast that Brazil’s economy will shrink by 4.3% this year. Official data this week showed that the country’s GDP contracted by 5.4% in the first quarter compared with the same period last year. Although bad, many economists were expecting the figure to be much worse.
- The US economy grew at its slowest pace in two years during the first three months of 2016, raising questions over the durability of its seven-year expansion at a time of global uncertainty. Gross domestic product rose at an annual pace of 0.5% in the first quarter, less than half the rate set in the final three months of 2015, according to figures from the Commerce Department. The numbers were held back by tumbling corporate investment, lower exports and a deceleration in consumer spending growth that came despite rising personal incomes.
- The US economy added 160,000 jobs in April. The unemployment rate was unchanged at 5%. Wages rose in the month and are now up 2.5% year over year.
- Argentina clinched its long awaited return to international capital markets with the largest sale of debt by any developing nation and one of the biggest order books ever recorded. Fifteen years after it was locked out of markets as a result of debt default and conflict with creditors, the country sold $16.5bn of dollar-denominated debt, increased from a planned $15bn, as demand neared $70bn.
- The US economy added 215,000 jobs in March, above the slightly more than 200,000 expected by economists. The unemployment rate ticked up slightly to 5% from 4.9% as more people entered the workforce.
- The Economist Intelligence Unit claimed that has been clear for some time now that the BRICs grouping has had its day. While China and India have largely lived up to the grouping's characteristics of being fast-growing emerging economies of rising importance, Brazil and Russia have long disappointed. Neither have even kept up with the global average of late, let alone been outperformers. The EIU estimates that Brazil's share of world GDP has shrunk from 4.1% in 2011 to just 2.2% in 2015 - and it will be down to 1.6% in 2017 according to EIU current forecasts.
- Brazil’s GDP fell 1.4% in the final quarter of 2015 from the previous quarter, which was itself down 1.7% from Q2. For the full year 2015, Brazil's economy shrank 3.8%, the worst contraction since 1981's 4.4% fall, according to the World Bank.
- U.S. fourth-quarter GDP was unexpectedly revised upwards. The Commerce Department now thinks the economy grew at 1% versus the 0.7% originally reported. The US economy added 151,000 jobs in January. The unemployment rate fell to 4.9% - the lowest rate since early 2008. Wages also showed strong growth, rising 2.5% year over year - the biggest advance since mid-2009.
- Brazil announced R$83bn (US$20.4bn) in extra credit from the country’s state-run banks to help groups ranging from farmers to real estate companies survive the nation’s deepest recession in more than a century. The finance minister announced seven separate measures to free up credit from different areas of the economy.
- US manufacturers last month recorded their largest contraction in demand in more than six years as the strong dollar and low oil prices continued to drag on the economy. The Institute for Supply Management’s monthly manufacturing index slipped to 48.2 in December, marking the second month in a row that it had fallen below 50, the line between contraction and expansion. The reading was the weakest since June 2009 and marked the first time since the immediate aftermath of the global financial crisis that the US manufacturing sector has seen consecutive contractions.