Signs of an economic slowdown are being detected one after another in the United States and China, the two major countries (G2) leading the world economy. As the outlook for a prolonged economic downturn spread, international oil prices fell below $70 per barrel.
According to the ‘National Employment Report’ published by employment information company Automatic Data Processing (ADP) on the 6th (local time), employment in private companies in the United States increased by 103,000 in November compared to the previous month. This falls far short of the Wall Street Journal’s (WSJ) estimate of 128,000. Even compared to October (106,000), the increase in employment decreased. After the novel coronavirus infection (Corona 19), the leisure and hospitality industry, which had led the way in job creation, decreased by 7,000 jobs, the manufacturing industry decreased by 15,000 jobs, and the construction industry decreased by 4,000 jobs.
The wage increase rate in November was 5.6% compared to the same period last year. The increase has decreased from 5.7% the previous month and is the lowest since October 2021. Nella Richardson, chief economist at ADP, said, “This shows that the post-pandemic boom is over and that employment and growth across the economy will be more moderate next year.”
The situation is similar in China. On the 5th, international credit rating agency Moody’s downgraded China’s national credit rating outlook from ‘stable’ to ‘negative’. This is because the burden of financial support from the central government has increased as the debt of Chinese local governments and state-owned enterprises has increased. China’s Ministry of Finance claimed that the national debt was 61 trillion yuan (about 1 trillion won) as of the end of last year, which is only 50.4% of gross domestic product (GDP), but WSJ reported that the hidden debt is about 7 trillion to 11 trillion dollars (about 9,100 trillion won). It was reported that it is estimated to be ~1 trillion won.
International oil prices plummeted due to expectations that demand for crude oil would decrease due to concerns about the G2 economic slowdown. On the 6th, the closing price of West Texas Intermediate (WTI) crude oil (WTI) futures for delivery in January next year at the New York Mercantile Exchange was $69.38 per barrel, down $2.94 (4.1%) from the previous day’s closing price. It has been five months since July 3 that the WTI futures price fell below $70 per barrel.
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Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.