Charting the global economy: Weak jobs, steady inflation seal Fed rate cut

A record downward revision to annual US job growth, paired with no surprises in the latest inflation data, sealed the deal for the Federal Reserve to cut interest rates next week.

While traders are betting the US central bank will embark on a series of reductions, they concluded that the European Central Bank is done lowering borrowing costs after staying on hold for a second meeting. ECB policymakers offered no guidance on future steps, continuing to stress that they’ll act one meeting at a time based on incoming data.

Meantime, France’s political crisis is eroding an otherwise solid economy, leaving the country trailing the recovery in the rest of Europe.


Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:

US

US job growth was far less robust in the year through March than previously reported, adding to mounting pressure on the Federal Reserve to lower interest rates. The number of workers on payrolls will likely be revised down by a record 911,000, or 0.6%, according to the government’s preliminary benchmark revision.

Underlying US inflation rose as expected in August. Goods prices, excluding food and energy, accelerated 0.3%, matching the biggest climb since May 2023. That reflected increases in new and used cars, apparel and appliances, which some economists pointed out as possible impacts of tariffs. But analysts were generally divided as to how much of a role the duties played in the report, with others more focused on surges in travel-related services like airfares and hotel stays.

A third of high-level roles at the Bureau of Labor Statistics — which produces marquee numbers on US jobs and inflation — are vacant, according to its website. While the commissioner role has been temporarily filled, a range of other leadership positions that oversee various aspects of employment statistics and regional field operations sit empty.

Tricolor Holdings Inc., which built its business selling used cars and making loans to low-income and undocumented immigrants, filed for bankruptcy Wednesday, potentially saddling major financial institutions with losses and leading authorities to probe allegations of fraud. While some of its circumstances are specific, they also reflect broader pain for lower-income borrowers — and, increasingly, wealthier Americans — as the economy cools.

Europe

The latest forecasts from the French national statistics agency Insee show growth of just 0.8% in 2025 compared to 1.4% in the rest of the euro area, ending two years of French out-performance. After the second government collapse in less than a year earlier this week, the new prime minister, Sebastien Lecornu, is facing mass protests over budget policy as he tries to build parliamentary support for cuts. The upheaval has again spooked investors, sparking selloffs of French assets that are driving up government borrowing costs compared to peers.

German industrial production rose more than expected in July, offering some hope that the country’s key sector may be stabilizing and soon overcome its years-long slump.

Asia

China’s export growth slowed to the weakest in six months as a slump in shipments to the US deepened again, although a surge in sales to other markets kept Beijing on track for a record trade surplus of over $1.2 trillion this year.

Taiwan’s exports grew more than expected to reach a monthly record of $58.5 billion, underscoring demand for the archipelago’s tech goods despite new US tariffs.

Emerging Markets

Turkey trimmed its forecasts for gross domestic product, signaling the government is prioritizing price stability over rapid growth. The government’s new Medium-Term Program unveiled late Sunday sees the economy expanding 3.3% this year and 3.8% next, down from previous projections of 4% and 4.5%.

South Africa’s economy expanded at the fastest pace in two years in the second quarter, lifted by a strong rebound in manufacturing and mining. Mining output grew 3.7%, its the fastest pace since the first quarter of 2021, with platinum group metals, gold and chromium ore the main positive contributors, Statistician-General Risenga Maluleke said.

World

The US will urge its allies in the Group of Seven to impose tariffs as high as 100% on China and India for their purchases of Russian oil in an effort to convince President Vladimir Putin to end his war in Ukraine. President Donald Trump said on Friday that his patience with Putin was “running out fast” and threatened new economic sanctions.

In addition to the ECB, Chile, Georgia, Serbia and Uzbekistan also held rates steady. Ukraine left rates unchanged as well as the nation seeks more aid from the International Monetary Fund to shore up its war-time budget. Turkey cut rates by more than expected, while Peru and Russia lowered borrowing costs as well.