Econoday’s economists look at the week’s important economic events.
UP 250: Are the PMIs offering accurate indications of the reopening economy?
The combination of the rapidly spreading Delta variant and some slightly less dovish sounding central banks is giving stock market investors pause for thought. Jeremy Hawkins looks ahead to Thursday’s ECB meeting and considers whether the central bank can bolster confidence in a non-inflationary economic recovery in Europe.
UP 249: Are the PMIs offering accurate indications of the reopening economy?
PMIs in Europe as well as similar business surveys in the US have been posting record scores in contrast to subsequent definitive data which have often been no better than mixed. Jeremy Hawkins and Mark Pender discuss the importance of PMIs to policy makers and forecasters, looking at their sampling structure and methodology for explanations to the ongoing disconnect.
UP 248: Central banks stick to their guns
Major dislocations between demand and supply continue to put upside pressure on final product prices but most central banks remain convinced that rising inflation will be short-lived. The team discusses the likelihood of future policy tightenings being delivered sooner rather than later.
UP 247: Demand soaring but inflation mixed; Covid reopenings uneven
Global demand continues to recover more quickly than output which remains restrained by shortages of raw materials. For many countries the growth gap has yet to drive up final product prices but an exception may be the US where prices are indeed jumping as the country benefits from an early reopening that has yet to unfold in many other economies.
UP 246:Inflation yet to shift monetary policy
The basic message from global central banks is holding, that inflation pressures now building will soon fade and that rate hikes are still well down the road.
UP 245: How and when to signal the policy shift
Federal Reserve communications are approaching the inflection point on when to signal the withdrawal of stimulus. For Europe, this pivot is still more distant given lagging vaccination rates and lagging economic performance.