Economy
US workers’ share of GDP slides to fresh record low
U.S. workers again saw their slice of the U.S. economy drop to a record low in the second quarter amid an ongoing productivity boom that is producing output gains that are outpacing wage growth, the Bureau of Labor Statistics (BLS) reported on Thursday.
The so-called labor share of nominal gross domestic product (GDP), which BLS defines as the percentage of output that accrues to workers in the form of compensation, fell to 52.9% in the second quarter from 53.7% in the first quarter.
That was the lowest since the series began in 1947, BLS said, as it reported stronger-than-expected growth in second-quarter productivity.
The labor share has been falling for decades, driven by forces such as the diminishing breadth and power of organized labor and globalization that shifted relatively high-paying manufacturing jobs to low-cost overseas production centers.
More recently, the economy has seen technological advances like automation and potentially artificial intelligence that allow companies to increase output without substantially adding to headcount.
The trend essentially means that benefits of productivity gains are accruing more toward business owners and shareholders than to workers through wage gains.
Real weekly earnings – which measure wage growth against inflation – were essentially unchanged during the first half of 2026, though the most recent data for June snapped three straight months of falling readings and was the strongest in six years.
Retail sales across the eurozone dropped unexpectedly in June after rising moderately in May, suggesting that consumption continues to weigh on the economy in the second quarter, official data revealed on Thursday.
Retail sales decreased 0.3% in June from May, Eurostat reported. Sales had increased 0.4% in May but fell 0.4% in April.
The decline came in contrast to economists’ expectations for a slight increase of 0.1%.
ING economist Peter Vanden Houte said data reinforced the view that consumption was not a major driver of growth in the second quarter. Some improvement can be expected, but a genuine consumption boom looks unlikely at this stage, he noted.
Sales of food, drinks and tobacco fell 0.5% and that of non-food products slid 0.4%. Meanwhile, sales of automotive fuel in specialized stores increased 1.5%.
On a yearly basis, retail sales posted an expansion of 0.7%, which was weaker than the prior month’s 1.9% increase and economists’ forecast of 1.0% growth.
Retail sales in the European Union edged down 0.1% from May but increased 1.2% from the previous year.
Among member states of the EU, the largest monthly decreases in sales volume were reported in Finland, Romania and Germany. Meanwhile, Luxembourg, Portugal, Croatia and Sweden registered the highest increases.
Syria has achieved self-sufficiency in wheat production for the first time since the outbreak of its civil war in 2011, an agriculture official said Thursday, marking a milestone for the country’s food security after years of depending on imports.
As well as the war hitting the agriculture sector hard, Syria has seen drought in recent years, with the United Nations saying 2025 saw the country’s worst climate conditions in decades, also impacting wheat-growing land.
“There won’t be any need for (wheat) imports this season,” said Ahmed Qadoun, deputy general director of the Syrian Grain Establishment, adding that Syria had last been self-sufficient in 2010.
On Wednesday, state news agency SANA reported that the grain establishment had received 2.7 million tons of wheat from across Syria during this year’s harvest, exceeding the national annual requirement of 2.55 million tons.
Before the civil war erupted in 2011, Syria was self-sufficient in wheat, producing an average of 4.1 million tons annually.
But after the conflict and drought disrupted production, Syria’s dictator Bashar Assad used to rely on imports, particularly from ally Russia, for wheat.
Syria’s new authorities took power in 2024, and the country said last year that it had received wheat shipments and donations from countries including Russia and Iraq.
The United Nations said in June that more than 13 million Syrians, or over half the population, were facing acute food insecurity.
German giant Siemens is another company benefiting from the artificial intelligence investment boom, reporting its highest-ever quarterly industrial profit and raising its full-year guidance on Thursday.
Siemens said it was seeing strong demand for data centers used to process AI, as well as for AI-enabled software and devices used to control factories and buildings.
Sentiment was also improving from aerospace, defense and machine-building customers, prompting the company to raise its full-year profit guidance after beating third-quarter expectations.
“Our sharp focus on driving industrial AI and our strong positioning in attractive markets give us a solid foundation for our success,” CEO Roland Busch told reporters.
The company’s industrial AI products, which help customers speed up innovation and improve productivity, were driving growth, he added.
Siemens was also benefiting from strong demand from the electronics and semiconductor makers, many of which are expanding capacity to supply AI-related equipment and chips.
“There is tremendous demand for electronics,” Busch said.
“They are building more and more factories, and they need to be automated, which is where Siemens’ business comes in.”
Siemens was working with nine of the Top 10 largest data center providers, he said, while orders had increased by a triple-digit percentage in the first nine months of its 2026 fiscal year.
Highest quarterly industrial profit
Companies like Siemens, Swiss rival ABB and France’s Schneider Electric are seeing surging demand as Big Tech races to add data centres, chips and electricity capacity for AI training and operation.
Capital spending by five of the largest technology companies, a key driver of the global data-centre boom, is expected to rise 75% in 2026 from more than $400 billion in 2025, the International Energy Agency (IEA) said in April.
For the quarter to the end of June, Siemens reported industrial profit rising 25% to 3.52 billion euros ($4.09 billion), its highest quarterly figure, beating forecasts of 3.18 billion euros in a company-gathered consensus.
Revenue rose 7% to 20.79 billion euros, ahead of forecasts for 20.64 billion euros, while orders picked up 13% to 27.90 billion euros, also a quarterly record.
Its shares still fell 5.2% in mid-morning trading.
Up to Wednesday’s close, they had gained nearly 20% from the beginning of the year to hit a record high at 291.50 euros in the session.
The company also said it had agreed with German tax authorities on the treatment of Siemens Healthineers shares that it plans to distribute to investors following the planned spin-off, meaning the distribution would be tax-free for Siemens shareholders.
A top Turkish official reiterated on Wednesday a call for the European Union to include Ankara in its new trade policies as the bloc looks to boost its competitiveness and drive strategic autonomy at a time of rising competition from China and the threat of U.S. tariffs.
Trade Minister Ömer Bolat said that the EU’s emerging trade, competition and industrial policies should be designed to include Türkiye, arguing that such an approach would strengthen the bloc’s competitiveness and Europe’s economic security.
Bolat made the remarks in a meeting with Spanish Economy, Trade, and Business Minister Carlos Cuerpo in Madrid to discuss bilateral economic relations, Türkiye-EU ties, and recent global and regional economic developments.
“We discussed the EU’s recently implemented trade, competition and industrial policies, particularly the Industrial Acceleration Act (IAA),” Bolat said on Turkish social media platform NSosyal, referring to a draft bill introduced by the European Commission in March.
The bill includes a “Made in EU” designation, which sets local content obligations requiring a specific portion of goods in public procurement and support schemes to originate from the EU or customs union partners.
Türkiye has long advocated for the need to update the decades-old customs union partnership it has with the EU, its top trading partner. The business community has also often emphasized that Türkiye’s inclusion in new frameworks would benefit not only Ankara, but also the EU amid fragility and shifts in geopolitical order.
“We emphasized that shaping these policies through an inclusive approach that also covers Türkiye would make significant contributions both to the EU’s competitiveness and to Europe’s economic security,” Bolat noted.
He also said Spain is one of Türkiye’s most important trading partners within the EU, calling the two countries strategic partners, friends and allies.
The two also discussed Türkiye’s expectations for the updating and more effective implementation of the Türkiye-EU Customs Union, which Bolat said forms the foundation of Ankara’s strong economic integration with EU member states.
Public procurement was identified as another priority area that could advance economic cooperation, he said.
Upping goal for bilateral trade
Bolat and Cuerpo agreed to hold the fourth meeting of the Türkiye-Spain Joint Economic and Trade Commission (JETCO) in Madrid this fall, with strong participation from the business communities of both countries.
Spain is Türkiye’s fourth-largest trading partner within the EU, with annual bilateral trade currently totaling about $20.5 billion.
“Our goal is to increase our bilateral trade volume with Spain from $20.5 billion to $25 billion annually in the medium term,” Bolat said.
He added that the longstanding friendship and strategic partnership between the two countries would continue to get stronger through innovative business initiatives and mutual trust.
During the meeting, Bolat also congratulated Spain on winning the 2026 FIFA World Cup last month and expressed Türkiye’s condolences over recent wildfires in the country.
He reaffirmed Ankara’s support for Spain in dealing with the fires after Türkiye deployed two firefighting aircraft to Spain to help it contain the blazes.
The minister was also due to meet with his counterpart in Poland on Thursday and also meet with the businesspeople in the Central European country – also one of its important trading partners.
Declining water levels on some of Germany’s major rivers, including the Rhine, exacerbated by heat and drought, are raising fears that severely constrained riverboat cargo traffic may deal yet another blow to the struggling economy.
The Rhine riverbed is partially dry near steelmaker Thyssenkrupp’s blast furnaces in Duisburg, a picture of how low water levels pose a new challenge for German industry.
The mighty waterway also winds past car factories, chemical plants and big river ports as it passes through the industrial heartland of Europe’s biggest economy.
Shallow water is imposing tighter limits on how much ship cargo can float down the river – sending prices up for riverboat freight and heaping pressure on the government to act.
On Thursday, newly appointed Transport Minister Steffen Bilger plans to meet in Bonn with industrial executives, shipping companies and port bosses in hopes of finding practical solutions to the unfolding crisis.
Michael Ebling, economy minister for Rhineland-Palatinate state, has called on the government to fast-track a project to deepen a key stretch of the Rhine in Germany, arguing that this strategic waterway must remain operational year-round.
The river handles around 80% of Germany’s inland waterway traffic, according to Rico Luman, an economist at ING.
Every year, some 285 million tons of goods travel along the river, which links many of Germany’s biggest industrial hubs with the major Dutch port of Rotterdam.
Industry feeling the pinch
The port in Duisburg, in Germany’s steel-producing Ruhr region, has reported that vessel loading capacities have dropped to about one-third of their usual levels.
The lower loads have led to a 50% to 60% increase in the number of port calls in recent weeks, as well as a shift of cargo toward smaller vessels, rail and road transport.
In the oil sector, loads are sometimes capped at between 300 and 400 tons for 110-meter tanker barges, leading to a surge in the number of trips required.
That has driven up shipping rates, with prices hitting 200 euros ($230) per ton this month for petroleum products shipped between the industrial city of Karlsruhe and the coastal ports of Amsterdam, Rotterdam and Antwerp.
That easily broke the previous record of 130 euros per ton set in August 2022, according to the Dutch firm Insights Global.
For German industrial producers, the blow comes at a difficult time, as many are already suffering from high energy costs, stiff global competition and U.S. tariffs.
Thyssenkrupp has turned to shallow-draft ships to keep the necessary raw materials and finished products moving on the river. So too has chemicals giant BASF, which operates a massive production complex upstream from Duisburg in Ludwigshafen.
Speciality chemicals company Covestro said that shipping disruptions on the river are already affecting supply and production at certain cites. Covestro relies on the Rhine to ship more than 30% of its manufactured products and bring in nearly 75% of the needed raw materials.
Another German chemicals firm, the Cologne-based Lanxess, described the situation as “very difficult” with barge deliveries severely restricted and some loading and unloading areas inaccessible.
In the refining sector, Shell said it is making greater use of storage capacity and attempting to divert some shipments to rail, road, or pipelines.
In need of a rainmaker
Other modes of transport face higher costs and other constraints, making replacing the heavily loaded river barges a tough and expensive challenge.
Germany faces a chronic shortage of truck drivers, and a fresh surge in fuel prices due to the ongoing Middle East war.
The country’s overloaded rail network, meanwhile, has long been the source of complaints for passengers.
State-owned rail freight operator DB Cargo said it is working with customers to find “pragmatic solutions… within the limits of available rail infrastructure capacity”.
ING economist Carsten Brzeski noted that a 2018 drought shaved an estimated 0.3 percentage points off German growth, and said that the economic impact could be even more pronounced this year.
The lowest water levels on the Rhine normally do not come until September or October, Brzeski noted, but levels this week are already at unprecedented lows with little rain forecast.
Unless the German government can find a rainmaker, he quipped, the dry spell could be a tough blow to an economy that has finally returned to modest growth after a prolonged period of stagnation.
Turkish Airlines (THY) reported Wednesday a sharp decline in second-quarter net profit as soaring jet fuel prices and higher operating costs weighed on earnings despite double-digit revenue growth and resilient passenger demand.
The national flag carrier posted a net profit of $197 million for the April-June period, according to its financial results, well below analysts’ consensus estimate of about $248 million and down 71% from a year earlier.
The aviation industry has been hit by soaring jet fuel prices as the war in the Middle East rumbles on, disrupting supplies of petrochemical products down the key Strait of Hormuz.
Turkish Airlines’ revenue rose 21% year-over-year to $7.2 billion, slightly exceeding market expectations of $7.1 billion, supported by higher passenger yields and robust cargo demand.
Passenger numbers remained broadly unchanged from a year earlier at 23.2 million, while passenger revenue increased 15% to $5.7 billion.
Cargo revenue surged 58% to $1.3 billion.
Available seat kilometers (ASK), a key measure of airline capacity, increased 1.2% year-over-year to 68.2 billion.
The airline reported an operating loss of $64 million for the quarter, reversing an operating profit recorded in the same period last year as higher costs outweighed revenue growth.
However, gains from its investment portfolio helped the company remain profitable at the bottom line.
EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) fell 41% from a year earlier to $906 million.
Fuel weighs on profitability
The biggest drag on THY’s profitability came from fuel expenses, which climbed 93% year-over-year to $2.77 billion, up from $1.44 billion in the second quarter of last year.
Global jet fuel prices are forecast to average $152 per barrel this year, nearly 70% above 2025 levels, according to the International Air Transport Association.
Fuel accounted for 32.1% of Turkish Airlines’ total operating expenses during the quarter, while personnel costs represented 24.3%.
For the first six months of the year, the company’s EBITDAR margin declined to 12.8%, narrowing by 740 basis points compared with the same period of 2025.
Middle East disruptions weigh on capacity
Turkish Airlines has benefited as passengers rerouted away from Gulf hubs following disruptions in the Middle East.
But Gulf airlines are restoring flights and competing more aggressively for Asia-Europe traffic, while elevated fuel prices are expected to keep pressure on costs.
THY’s regional performance reflected ongoing disruptions in the Middle East.
Domestic capacity, measured by available seat kilometers, declined 2%, although passenger unit revenues increased 14%.
Capacity on Middle East routes fell 48% due to flight disruptions in the region.
In contrast, capacity on Far East routes increased 18%, highlighting a continued shift toward Asian markets.
Net profit margin narrowed to 2.7% from 11.6% a year earlier, reflecting the sharp deterioration in operating profitability despite continued growth in revenue.
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