US – Retail Sales continue brisk performance

European Commission – new president Juncker with ambitious agenda US – Retail Sales continue brisk performance

US retail sales continued the recovery in June after the sharp slowdown at the beginning of the year. The monthly growth rate slowed in June compared to May, but monthly rates are volatile and first estimates are prone to (significant) revisions. More stable and accordingly more meaningful is the development of the year-on-year growth rate, which shows a strong development. Growth is not only significantly above levels at the beginning of the year but the highest since the summer of 2013. Car sales suffered somewhat in June, though other product categories fared well, broadening the upturn.

Jean-Claude Juncker was elected president of the European Commission in the European Parliament. Juncker takes office with an ambitious agenda focused on jobs, growth, fairness and democratic change. In order to boost growth and the creation of jobs, Juncker intends to mobilize up to EUR 300bn in additional public and private investment over the next three years. The focus of these investments should be on infrastructure, notably broadband, energy networks, education, research and innovation, renewable energy and energy efficiency. Juncker believes, however, that the stability and growth pact, with limitations on public debt levels, has to be respected, because the past has shown that sustainable growth cannot be built on ever-growing mountains of debt.

Juncker is also well aware that growth and new jobs will only return to Europe in a climate of entrepreneurship. One part of the agenda will thus focus on swiftly removing red tape on the European and national levels for SMEs, since they are the backbone of the European economy (creating more than 85% of new jobs). Furthermore, Juncker wants to strengthen the industrial base with the aim of bringing industry’s weight in the EU’s GDP back to 20% by 2020, from less than 16% today. To achieve this, investment in new technologies as well as qualification of workers will be supported. In order to improve financing of the European economy, Juncker wants to complement the new European rules for banks with a ‘Capital Markets Union’. This should help to further integrate capital markets and increase the attractiveness of Europe as a place to invest.