Articles Highlight Deep-Seated Issues Amidst AI Surge
Core inflation in Taiwan remained steady at 3.1% annually, while the median monthly wage increased by 2.78%, indicating that many workers earned less than the average. The Executive Yuan approved a special budget of NT$550 billion, including NT$236 billion for NT$10,000 cash handouts per person, which could boost retailers and other consumer-focused businesses ahead of the holiday season.
The consumer price index rose 0.4% monthly, and annual inflation reached 2.9%. Consumer confidence this month dropped to 55.4, the lowest since May, reflecting cautious sentiments among consumers. Weekly jobless claims for the week ending on Sept. 6 spiked to 263,000, the most since October 2021, suggesting a potential increase in unemployment.
Taiwan's electronic components and information and communications technology products account for over 70% of Taiwan's exports. During the same period, Taiwan Semiconductor Manufacturing Co (TSMC) extended its record-setting streak, and companies like Delta Electronics Inc and several other electronics heavyweights reached historic highs. The annual Semicon Taiwan trade show boosted market sentiment, particularly for the chip sector.
The average monthly wage for Taiwan's industrial and service sectors in January to July increased by 2.98%, the strongest growth in three years. However, only 16% of workers in Taiwan received a pay raise in the first three quarters of 2022. Most employers in Taiwan were conservative about their business outlook, with the majority of the workforce in Taiwan's tech sector being in traditional and domestic demand-focused industries.
Foreign institutional investors recorded nine consecutive sessions of net buying, totaling NT$214.8 billion (US$7.12 billion) as of Friday, amid signs that the US Federal Reserve would cut interest rates this week. The TAIEX climbed to record highs for five consecutive sessions last week, reflecting positive market sentiment.
In the industrial and service sectors, institutions received the highest wages on average in the January to July period, according to available data. However, specific wage information for individual institutions in Taiwan during this period could not be found. A majority of the workforce in Taiwan's tech sector is in traditional and domestic demand-focused industries.
The broader economic impact of the cash handout measure depends on whether households spend the money on additional services, products, and big-ticket items. The cash handout measure could potentially stimulate consumer spending and boost the economy, but its full impact remains to be seen.
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