• The U.S. economy grew faster than initially thought in the second quarter amid strong consumer spending, while corporate profits rebounded, which should help to sustain the expansion.
• Gross domestic product (GDP) increased at a 3.0% annualised rate last quarter, the Commerce Department's Bureau of Economic Analysis said in its second estimate of second-quarter GDP on Thursday. That was an upward revision from the 2.8% rate reported last month. The economy grew at a 1.4% pace in the first quarter. Economists polled by Reuters had forecast GDP would be unrevised at a 2.8% pace.
• Consumer spending, which accounts for more than two-thirds of the economy, increased at an upwardly revised 2.9% rate. It was previously reported to have grown at a 2.3% pace. This offset downgrades in business investment, exports, and private inventory investment.
• Spending is being supported in part by wage gains, but momentum is slowing as the labour market shifts into lower gear. Personal income increased by $233.6Bn in the second quarter, a downward revision of $4.0Bn from the previous estimate. Corporate profits, including inventory valuation and capital consumption adjustments, increased $57.6Bn after declining by $47.1Bn in the first quarter.
• Profits of domestic financial firms increased $46.4Bn, while those of non-financial institutions rose $29.2Bn, more than offsetting a $18.0Bn decline in profits from the rest of the world. When measured from the income side, the economy grew at a 1.3% rate last quarter. Gross domestic income (GDI) increased at a 1.3% pace in the January-March quarter.

(Source: Reuters)

• The number of Americans filing new applications for jobless benefits slipped last week, but re-employment opportunities for laid-off workers are becoming scarcer, a sign that the unemployment rate probably remained elevated in August.
• Though the labour market is slowing, it is doing so in an orderly fashion that is keeping the economic expansion on track. The economy grew faster than initially thought in the second quarter, powered by consumer spending, other data showed on Thursday. Corporate profits also rebounded last quarter, helping to further dispel fears of a recession.
• While the labour market slowdown positions the Federal Reserve to start cutting interest rates next month, the data argues against a 50-basis point reduction in borrowing costs.
• Initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 231,000 for the week ended Aug. 24. Economists polled by Reuters had forecast 232,000 claims for the latest week. Claims have retreated from an 11-month high in late July as distortions from temporary motor vehicle plant shutdowns for new model retooling, and the impact of Hurricane Beryl faded.
• The Labour Department's Bureau of Labor Statistics last week estimated that employment growth was overstated by 68,000 jobs per month in the 12 months through March. But most economists viewed this so-called benchmark revision estimate as misleading.
• The benchmark estimate is based on the Quarterly Census of Employment and Wages data, derived from reports by employers to the state unemployment insurance programs. The data does not include undocumented immigrants, a group that economists believe contributed to strong job growth last year.
• A step-down in hiring because of tighter monetary policy is accounting for the loss of labour market momentum, rather than layoffs. It has attracted the attention of officials at the U.S. central bank, including Fed Chair Jerome Powell who last week said, "the time has come for policy to adjust."

(Source: Reuters)

• Guyana now produces more hydrocarbons in the Caribbean region than veteran producer Trinidad and Tobago (T&T) according to recent data. Data from T&T's Ministry of Energy and Energy Industries shows oil and condensate production of 50,246 barrels per day (b/d) in the first four months of 2024. Gas production in the same period averaged almost 2.6Bn standard cubic feet per day (mscf/d) for T&T. Collectively, this amounts to approximately 484,000 barrels of oil equivalent per day (boe/d).
• Trinidad's hydrocarbon production is on a steady decline, down from approximately 719,000 boe/d in 2015. Notwithstanding, Trinidad is hoping cross-border cooperation with Venezuela brings some gas projects to fruition to help buoy its declining output, including the highly anticipated Dragon project.
• Guyana, on the other hand, started oil production in December 2019 and is experiencing significant annual increases. ExxonMobil, the sole operator with projects in production, has added an average of 98,000 b/d in the period 2020-2024.
• In the first four months of 2024, oil production averaged 616,000 b/d. Considering data for May-June, the half-year average jumps to 623,000 b/d, based on data from the Ministry of Natural Resources. While the standardised conversion of hydrocarbons into barrels of oil equivalent per day makes the comparison simple, oil and gas differ significantly in their market value, applications, and the products derived from them.
• Oil is primarily refined into fuels such as gasoline, diesel, and jet fuel, with a significant portion also used in the production of petrochemicals. Natural gas, which makes up the bulk of Trinidad's production, is in contrast predominantly used for electricity generation, heating, and as a feedstock for chemical production, including fertilisers.
• Yet, the comparison highlights a significant turning point in the Caribbean's energy landscape. Trinidad and Tobago, a veteran producer with over a century of industry experience, is now seeing its production decline as its reserves mature. Meanwhile, Guyana, having commenced production only five years ago, is experiencing an oil boom.

(Source: Trinidad Express Newspaper)

• The Bermuda Tourism Authority (BTA) released its visitor metrics for the first half of 2024, revealing significant growth in both air and cruise arrivals, alongside increased visitor spending and notable shifts in travel trends.
• According to officials, Bermuda welcomed a total of 61,619 leisure air visitors during the first six months of 2024, marking an 11.4% increase over the same period in 2023. These visitors contributed an estimated $132.3Mn to the local economy, representing a year-over-year increase of 31%, with an average spending of $2,147 per person.
• Although the average length of stay decreased slightly to 6.13 days from 6.4 days in 2023, and hotel occupancy dipped by less than 1 percentage point compared to the previous year, the island’s hotels saw a 9% increase in revenue per available room (RevPAR). This is reflected in higher spending by visitors, which continues to support the local hospitality industry.
• Cruise tourism also experienced robust growth, with Bermuda welcoming 234,790 cruise passengers in the first half of 2024, an increase of 12.3% over 2023. This influx of cruise visitors has contributed to the island’s economy, particularly for local service providers, entertainment, and the transportation sector.
• Further, the sovereign now boasts the highest number of direct routes in its history, with sixteen at the peak this summer. Air capacity to Bermuda for the first half of the year was up 28% and, for several months, exceeded the numbers seen in 2019.
• Tracy Berkeley, CEO of Bermuda Tourism Authority said, “The first half of 2024 has shown promising growth across our key tourism measures. The increase in visitor spending, the rise in air, cruise and yacht arrivals, and the rebound in leisure travel demonstrate the resilience and appeal of Bermuda as a premier destination.

 (Source: BerNews)

• Jerome Powell's Jackson Hole speech has turned Sept. 6 and Sept. 18 into the two most important dates for U.S. monetary policy in years, as events on both days center on the Fed's new guiding light: the unemployment rate. The first marks the release of the August non-farm payrolls report, and the second will see the Fed's much-anticipated interest rate decision and, just as crucially, its updated Summary of Economic Projections (SEP).
• Powell essentially made two pivots in Jackson Hole. The first, as expected, is his clear signaling that a rate cut is forthcoming. The second, perhaps less anticipated, is his equally clear emphasis that unemployment, not inflation, is now the number one determinant of upcoming policy decisions.
• However, Powell's warning that the Fed does "not seek or welcome further cooling in labor market conditions" basically means the current unemployment rate of 4.3% – which is still fairly low by historical standards – is now a "line in the sand" that, if crossed, will likely trigger a policy response.
• "The unemployment rate is now around 90% of the Fed's dual mandate, inflation is about 10%," said John Silvia, founder of Dynamic Economic Strategy, adding that Powell's pivot to unemployment from inflation is remarkable considering the economy isn't in recession.
• There's more than one way of measuring the strength or otherwise of the labor market and, by extension, the economy. They include nominal job growth, the ebb and flow of the labor force, and one of the Fed's favorites since the COVID-19 pandemic: the JOLTS estimates of outsized quits and job openings. But for the public, markets at large and politicians, the unemployment rate offers the clearest picture of how well the labor market is holding up.
• Market participants are firmly pricing in a rate cut at the Fed’s Sept. 18 meeting. Traders are currently pricing in a roughly 63.5% chance of a 25-basis-point rate cut next month, with 36.5% pricing in a 50-basis-point rate cut, according to the CME Group’s FedWatch Tool.

(Source: Reuters)

• U.S. single-family home prices fell in June, leading to the smallest annual increase in nearly a year, as higher mortgage rates pushed buyers to the sidelines and boosted housing supply.
• House prices dipped 0.1% on a month-on-month basis after being unchanged in May, the Federal Housing Finance Agency said on Tuesday. They increased 5.1% in the 12 months through June, the smallest year-on-year rise since July 2023, after advancing by an upwardly revised 5.9% in May.
• The rise in annual house prices was previously reported to have been 5.7% in May. Prices were up 0.9% in the second quarter compared to the January-March quarter. They increased 5.7% between the second quarter of 2023 and the April-June quarter this year.
• House price inflation is likely to moderate further in the months’ ahead as new housing supply has surged to levels last seen in early 2008. The existing homes inventory has also risen to the highest level in nearly four years.
• An outright decline in house prices is, however, unlikely in the absence of significant labor market deterioration. Lower mortgages, with the Federal Reserve expected to begin its interest rate cutting cycle next month, should boost demand and absorb some of the excess inventory.
• All nine census regions recorded annual house price gains in June, with big increases in the Middle Atlantic, East North Central, New England, and East South areas. Prices in the West South-Central region trailed with a 2.7% increase.

(Source: Reuters)

• United Oil & Gas Plc (AIM: "UOG"), the oil and gas company with a high impact exploration asset in Jamaica and a development asset in the UK has noted the recent rumours circulating in Jamaica media regarding its Walton Morant licence.
• United confirms that it has drilled no wells in the Walton Morant licence and therefore, no commercial oil or gas discovery has been made. United holds a 100% working interest and is currently engaged in a farm-out process. United's 2024 work programme is focused on conducting piston core sampling, which aims to detect any oil residue before considering future exploration drilling targets.
• Brian Larkin, United Chief Executive Officer, commented: "The Walton-Morant Licence is a vast exploration area containing numerous promising prospects. We are committed to improving our understanding of the resource potential within the licence area.”
• He further noted that, “We continue working to secure a strategic partner to unlock the immense potential within the licence, including recent positive interest that has been shown by several parties. Following securing an extension to the licence, our 2024 work programme is underway, and we will update the market at the next suitable opportunity."

(Source: United Oil & Gas)

• Tropical Battery Company Limited announced the appointment of Mrs. Jody Gager-Rose as a new director to the Board of Tropical Battery Company Limited, effective August 8, 2024.
• Jody Gager-Rose is a distinguished finance professional with over 21 years of experience in accounting, including 9 years at a senior management level. She holds an MBA from Heriot Watt University and is a Fellow Chartered Certified Accountant (FCCA) and a Fellow of the Institute of Chartered Accountants of Jamaica (FCA).
• Jody’s expertise lies in International Financial Reporting Standards (IFRS), with a proven track record in preparing standalone and consolidated financial statements, particularly within the travel, leisure, and tourism sector.
• Her career highlights include her tenure as Chief Financial Officer, where she oversaw the accounting, purchasing, and IT departments. At a big four audit firm, Jody rose to the position of Director, where she supported audit business operations across the Caricom region.
• Tropical’s stock price has increased 24.6% since the start of the calendar year and closed at $2.43 on Tuesday, August 27th. At this price, it currently trades at a P/E of 15.38x earnings, which is below the junior market distribution sector average of 18.58x earnings.

(Sources: JSE & NCBCM Research)

• Barbados is enjoying a record-breaking year for tourist arrivals, thanks in large part to the recently concluded ICC T20 Cricket World Cup and the popular Crop Over festival.
• Javon Griffith, president of the Barbados Hotel and Tourism Association (BHTA) posit noted at the association’s quarterly media update that “Tourist arrivals are expected to surpass pre-pandemic levels in all markets. This is supported by the ICC World Cup, Crop Over, and increased airlift capacity into Barbados this year.” He further noted that “The appetite for Barbados remains very strong, with early forward bookings from major source markets exceeding 2023 by 18%.”
• From January to June 2024, the island welcomed 381,997 stayover arrivals, a 15% increase from the 323,948 arrivals during the same period in 2023, the BHTA head said, quoting figures from the Barbados Statistical Service. Notably, arrivals from CARICOM countries increased by 16%, with 42,063 visitors between January and June. Canada and the United States also showed impressive growth, with 16 and 31% increases, respectively.
• The cruise sector has not been left behind in this tourism resurgence. Griffith revealed that cruise activity is projected to continue recovering from pandemic setbacks, aided by the return of summer cruise activity and an increase in cruise calls in the last quarter. From January to June 2024, Barbados welcomed 475,028 cruise passengers, compared to 434,565 for the same period in 2023.  “As you would recall, we had no cruise ship arrivals between June to September 2023. This year, we have had regular visits from the Rhapsody of the Seas every Friday,” he noted.
• Looking ahead, the island is set to benefit from a gradual increase in flights starting with the winter 2024-2025 flight schedules. British Airways and Virgin Atlantic will both double their London Heathrow to Barbados flights, while TUI will continue to service the destination with up to 99 flights a month from various UK cities.
• From the United States, JetBlue will triple its flights from Boston to Barbados, while American Airlines will resume daily flights from New York JFK. In an exciting development, Delta will return to Barbados after an eight-year hiatus, offering a daily service from Atlanta in winter.

(Source: Barbados Today)

• Panama’s dual function as a regional finance hub and a critical chokepoint in global merchandise trade means the economy will continue to channel foreign currency transactions and financial flows that comfortably exceed the size of its overall output.
• While seemingly excessive by other Emerging Market standards, Panama’s external accounts reflect its central role in trade and finance in the Western Hemisphere and are unlikely to be destabilising in the foreseeable future. Key to this are stable financial institutions, transparent governance, a dollarized economy, and the geographic location of the Panama Canal.
• Following a sharp widening of the current account deficit in late 2023 due to an abrupt drop in Canal activity, Fitch Solutions expects the deficit to widen again to 4.8% of GDP in 2024, up from 4.5% in 2023, before narrowing to 3.4% in 2025.
• That said, Panama’s external position will remain vulnerable to climatic changes, as well as external cyclical downturns, de-globalisation, and the challenges posed by coordinated crackdowns on tax havens in the longer term.
• Nevertheless, Panama has proven highly resilient in the face of such challenges in previous years and its high capacity to borrow externally and attract large quantities of foreign direct inflows (FDI) means the economy is well placed to continue adapting to changing climatic conditions.

(Source: Fitch Solutions)