The surge in commodities prices this year and improved economic prospects as the world recovers from the coronavirus pandemic are generating higher consumer inflation.
In the U.S., the closely watched consumer price index posted its biggest monthly advance in almost 12 years, smashing estimates. With unfilled job openings stretching to a record as demand grows for goods and services in the world’s largest economy, companies may have to boost pay.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
U.S.
Record Rise
Travel and leisure categories post record increases amid reopening
Source: Bureau of Labor Statistics
*Note: Represents percent change between March and April 2021
Consumer prices climbed in April by the most since 2009, topping forecasts and intensifying the already-heated debate about how long inflationary pressures will last. Core prices, which exclude food and energy, registered the largest advance since 1982 on a pickup within industries hardest-hit by the pandemic.
Expecting More
Economists adjusting consumer price index forecasts higher through 1Q 2022
Source: Bloomberg monthly survey
Note: Reflects YoY change at end of each quarter. 71 economists surveyed from May 7-13
The latest monthly survey by Bloomberg shows forecasters have raised their projections for several measures of inflationary pressures -- the consumer price index, the personal consumption expenditures price index and the PCE measure excluding food and fuel -- for each quarter through March 2022.
Job openings surged to a record high, consistent with a rapid increase in labor demand. The number of vacancies exceed hires by the most in data back to 2000.
Europe
Better Outlook
The European Commission upgrades its estimates for euro-area growth
Source: European Commission
The euro-area economy will
grow more quickly this year than previously forecast as the region’s vaccination campaign gathers speed, fiscal support is rolled out and a strong global rebound helps exports.
The U.K. economy gained momentum in March as Britons geared up for the lifting of coronavirus restrictions.
Asia
Labor Drag
China’s population will likely peak by 2025
Source: NBS, United Nations World Population Prospects (2019), Bloomberg Economics
Bloomberg Economics’ key takeaway from China’s once-a-decade census is that the population will likely peak by 2025 -- much earlier than officials had expected -- which could wipe out the demographic dividend that had helped propel the economic ascent of the world’s most populous nation.
Spending Splurge
Priority on spending rather than sharp pivot to budget repair
Australian government budget papers
Australia unveiled a
big-spending budget that aims to run the economy hot, joining the U.S. and Europe with a fiscal-monetary tandem that seeks to drive unemployment down to levels rarely seen in the past 50 years.
Cities At Risk
Residents of Asia’s urban centers are most exposed to factors including air pollution, heat stress and climate change vulnerability
Source: Verisk Maplecroft Global Risk Analytics Dataset
Asian cities face the greatest risk from environmental issues including air pollution and natural disasters, according to a report by research firm Verisk Maplecroft.
Emerging Markets
Rising Inequality
Colombia’s population by income group
Source: National Administrative Department of Statistics
The tax proposal that sparked Colombia’s protests was bound to fail when the country’s economic recovery has been shaky, poverty has risen, and the middle class has shrunk.
Sending Money Home
Remittance flows held up overall in 2020, but regional disparities emerged
Source: World Bank
Global remittances showed surprising strength in 2020 despite dire projections, as heavy government stimulus spending put cash in immigrants’ pockets to send home.
World
Bloomberg Economics Nowcast
Reopenings across the U.S. and Europe are set to drive global growth
Source: Bloomberg Economics
Note: *=BE nowcast for world, BE forecast for others as actual first-quarter value not yet available
The world economy pushes into the second quarter with reopening across the U.S. and Europe set to drive growth of 1.4% from the previous quarter. That’s the latest signal from Bloomberg Economics nowcasts, which bring together close to 200 data series across 18 countries to provide a high-frequency read on the recovery.
Missed Opportunity
Inheritance levies account for only 0.5% of tax revenues in countries where they are still used
Source: Organisation for Economic Cooperation and Development
Note: Data are for 2019, except 2018 for Greece and Japan. Data for the OECD average refer to the 24 countries with these taxes. Portugal is not shown as inheritance tax revenues are not recorded in the tax revenue category that is the source for this figure
Inheritance taxes could make a return to the political agenda after decades of declining use as governments worldwide try to repair public finances and address widening inequality after the pandemic. Levies on inherited wealth dropped sharply in the 1970s, and now account for only 0.5% of tax revenues in countries where they’re still used, the OECD said.
— With assistance by Bjorn Van Roye, Eric Zhu, Andrew Atkinson, Ezra Fieser, David Goodman, Max De Haldevang, Michael Heath, William Horobin, Karoline Kan, Adrian Leung, Olivia Rockeman, Andrew Rosati, Jason Scott, and Alexander Weber
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Charting the Global Economy: Inflation Is Front and Center - Bloomberg
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