L1/ Eurostat data released on Thursday showed that the unemployment rate in the eurozone climbed to 6.5% in June on a seasonally adjusted basis, up from 6.4% in May, implying that around 11.122 million people in the eurozone were unemployed, and although the change was modest, it still marked the first rise since 2023, after a period of strong growth, the labor market began to weaken.
L2/ Despite the slight rise in the unemployment rate, Armin Steinbach, deputy chief economist at Capital Economics, believes that the unemployment rate will not "rise sustainably or substantially", the labor market in the eurozone as a whole remains tight, with unemployment near record lows and many companies reporting labor shortages, even if economic growth slows, the labor market remains somewhat resilient. According to the European Commission's survey results, industry confidence remained broadly stable in July, with the overall confidence index falling by only 0.1 percentage points. This suggests that despite the economic challenges, there has not been a significant decline in business and consumer confidence.
L3/ While the unemployment rate in the eurozone as a whole has not changed much, this data masks differences between countries, for example, Germany's unemployment rate has performed poorly, stabilizing at 6% in July, but is still gradually approaching the highs of the pandemic, and Germany's economic performance is weak, described as a "growth fault" in the EU and the eurozone, with negative growth in the last quarter, resulting in poor employment data compared to last year. As of June 2024, the EU unemployment rate is 6.0%, which remains stable compared to May 2024 and June 2023.
L4/ The Panama Canal has recently suffered the worst drought in its history, which has had a significant impact on the water level and vessel capacity of the Panama Canal, which has led to water shortages and forced the Panama Canal Authority to reduce the number of ships passing through the canal daily in response to the lack of water resources, the Panama Canal Authority is gradually restoring the canal's capacity, and the number of daily transit vessels in the canal increased to 34 at the end of July, said the deputy director of the Panama Canal Authority (Ilya Espino said it plans to increase daily traffic to 35 vessels by Aug. 5 and further to 36 vessels in September, a move that demonstrates the Authority's confidence that the canal will be back to close to full capacity in the coming weeks.
L5/ The Panama Canal Authority aims to restore the daily throughput of new Panama and existing locks to 36 to 39. At the height of the water crisis, the number of gates was reduced to 22, and there are plans to reduce it to 18, but these stricter restrictions have not been implemented, and the Panama Canal Authority usually limits the draught of ships only in the summer, which is often the dry season and requires careful management of water resources.
L6/ Currently, the draft of the Panama Canal is set at 46 feet, which allows most large ships to sail on the canal, but it is still 4 feet less than the peak of 50 feet, earlier, due to draft constraints, LNG carriers needed to be rerouted, large container ships could only be partially loaded, and some cargo was forced to cross the isthmus by rail for transshipment, which led to increased operating costs and reduced efficiency. Containers are transferred from one ship to another by rail to reduce delays.
L7/ Gatun Lake, an important reservoir of the Panama Canal and a drinking water supply for residents, gradually rises with the rainy season and is currently 84 feet. According to forecasts, the water level is expected to rise to 86 feet in October, which is very critical to alleviating water shortages. By comparison, the water level in Gatun Lake reached a high of 88 feet in December 2022 but has dropped to 79 feet in June 2023, showing seasonal variations and the effects of drought.
L8/ Despite the near-normal daily flow of the canal, the draft limit has not yet been fully restored, and this restriction may remain in place for some time until water conditions improve. In the long term, the Panama Canal Authority plans to build a second reservoir to increase resilience to the effects of climate change, in addition to rail development in other regions, such as Mexico, is also seen as an alternative to transportation to ease the pressure on the Panama Canal.
