Sunday, October 17

Charting the Global Economy: Inflation Builds; Jobs Miss in US


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(Bloomberg) — US employment growth fell short of expectations in September, while price pressures continued to mount in the UK and across Latin America. In India, dwindling coal supplies have raised the risk of power shortages.

New Zealand and Poland were among an increasing number of countries whose central banks are boosting interest rates to counter faster inflation.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:

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US

Job growth in September was the slowest this year, signaling a tempering of the labor market recovery. The unemployment rate fell to 4.8%, partly reflecting a decline in labor force participation among women.

Since the last major standoffs a decade or so ago over raising the debt ceiling, there’s been a sea change in the way investors, economists and officials think about public borrowing. They’ve become less interested in the debt’s size, and more focused on what it costs.

Early in the year, the hope was that the bottlenecks that gummed up the global supply chain in 2020 would be mostly cleared by now. They’ve actually only gotten worse — much worse — and evidence is mounting that the holiday season is at risk.

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Europe

Severe material shortages and long delivery times are weighing on demand for German manufactured goods, signaling that the country’s recovery may lose momentum in the final months of the year.

A market-based measure of expected inflation in the UK over the next decade topped 4%, bolstering wagers for tighter monetary policy. The move was spurred by a spike in energy costs with UK natural gas prices surging to a record, threatening to fuel higher consumer prices.

Asia

India is pushing state-run Coal India Ltd., the world’s top miner of the fuel, to boost production to help power plants navigate a supply squeeze. India, which relies on the fuel for about 70% of electricity generation, has already seen signs of power shortages, and needs to lift deliveries to avert the risk of blackouts. It’s also seeking to minimize short-term impacts on energy-hungry industrial users including producers of aluminum, cement, bricks and paper.

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Emerging Markets

Sub-Saharan Africa needs significant additional funding to counter damage wrought by the coronavirus pandemic, bolster its economic recovery prospects and mitigate threats posed by climate change, according to the World Bank.

Painful price increases across Latin America in September mean lots more work for the region’s major inflation-targeting central banks. Consumer prices soared well past policy maker’s tolerance levels in Brazil, Mexico, Chile, Colombia and Peru last month.

World

A number of central banks tightened monetary policy this week. New Zealand’s central bank raised interest rates for the first time in seven years and signaled further increases will likely be needed to tame inflation. Poland unexpectedly raised borrowing costs for the first time since 2012, while Romania also lifted rates.

European imports of US liquefied natural gas are likely to increase this month, despite rising energy prices and a tight supply of fossil fuels in Asia as colder weather approaches.

©2021 Bloomberg LP

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