UK economy grew 'more than first thought'

The UK economy grew 1.2% in the second quarter, the fastest rate of quarterly expansion since 2001. This expansion occurred at the same time the US had to revise its annual growth estimates down to 1.6% from 2.4%. The Office for National Statistics in the UK feels that the growth in the UK was boosted by the increase in construction output and that the overall effects of quarter were 'very positive'. However, many business leaders have warned that the "strong pace of growth would not last". One business leader argues that the US is a major driver of the global economy and that "we've got to ensure equally that growth in the US will get back on track" since any weakness in the US economy will ripple through to other countries, including the UK. So now it remains to be seen whether the current pattern of growth will remain or be reversed, as well as how the growth or decline of the US economy will effect that of the UK and other countries around the world.

Housing's new nightmare

Despite the continuous improvement in previous months on GDP and unemployment rates (3.2% GDP growth rate on the 1st Q 2010 and lowest jobless claim in April), the reversal shift is becoming the new trend. Currently, the jobless claims remains high (473,000 filed) and the new home sales drop 12.4% to a record low (from 315,000 in June to 276,000). Worse yet, some 3.51% of borrowers were 30 days late in their loan payments in the second quarter of 2010, up from 3.31% at the end of last year, according to new data from the Mortgage Bankers Association.

The economic atmosphere remains gloomy. It will be a a while yet before the US is going to get back on its feet.

Strikes in China Unprecedentedly Successful

China is not precisely well known for having a sincere regard for human rights. This naturally translates to labor rights within the economy. However, this disregard is starting to have repercussions for Chinese businesses. A series of strikes in southern Guangdong province  by mostly migrant workers at factories for Japan's Honda and Denso Corporation have set a precedent that offers hope to many human rights advocates interested in the Chinese economy. State-ownership and limited media rights to coverage mean that heretofore strikes have been remarkably unsuccessful. The recent strikes have been shockingly successful in making gains for workers. These strikes were likely met with success in part because the factories are Japanese-owned and thus the media was allowed to cover the events. Eventually, Honda and Denso employees were able to obtain pay increases and limited benefits. This may mark a slight shift in the structure of China's economic system. This is the first breach of their absolute ban on independent unions and collective bargaining. Such a shift would give workers significantly more power but may also raise costs in what in generally known as the "Workshop of the World."