(Bloomberg) — US consumer price and retail sales data this week underscored persistent inflation and robust demand that risk prompting the Federal Reserve to raise interest rates even higher than previously expected.
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The combination of rising borrowing costs and lingering price pressures is taking a bigger toll on household finances, with debt hitting a two-decade high.
Meanwhile, the European Commission is more sanguine about economic prospects for the euro-zone, while the latest read on Japan’s economy disappointed.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
US & Canada
US consumer prices rose briskly at the start of the year, while a separate report showed producer prices rebounded in January by more than expected, bolstered by higher energy costs.
The US economy showed remarkable resilience at the start of the year, highlighting robust demand that’s keeping inflation elevated and heaping pressure on the Fed to stomp the brakes even harder. Retail sales rose last month by the most in nearly two years, and separate measures of manufacturing also came in better than expected.
US household debt soared the most in two decades in the fourth quarter, with younger borrowers in particular struggling to make loan payments amid high inflation and interest rates. Mortgage balances, the biggest form of debt for American families, drove the increase. But debt grew across the board, with credit cards seeing the biggest jump in data back to 1999.
Canada’s explosive population growth from immigration is causing rents to surge in its biggest cities. And there’s another problem: The country isn’t even properly counting the number of people who need homes.
The euro-zone economy will fare better this year than previously expected as a mild winter and high levels of gas storage help to ease the energy crisis, and the labor market holds up, according to the European Commission.
UK wages rose quicker than expected at the end of 2022, heaping pressure on the Bank of England to deliver another interest-rate increase next month. Average earnings excluding bonuses were 6.7% higher in the three months through December from the previous year. That’s the fastest pace since records began in 2001, excluding the pandemic period.
Norway’s economic growth continued to exceed central bank’s forecasts at the end of last year, boosting expectations that Norges Bank may prolong its tightening campaign.
China may lose a key support for economic growth and the yuan this year as residents flock overseas again and exports continue to plummet because of a global slowdown. After hitting a 14-year high of almost $420 billion last year, the surplus on the current account — the broadest measure of trade in goods and services — is expected to narrow sharply this year.
Japan’s economy rebounded at a slower pace than expected in the fourth quarter, in a sign of ongoing weakness that will concern the central bank’s new governor amid intense speculation over possible changes in monetary policy after a decade of massive stimulus.
Argentina’s inflation sped up more than expected in January as price controls prove ineffective, further complicating the government’s strategy ahead of presidential elections later this year. Consumer prices rose 98.8% from a year earlier, more than the 98.6% median forecast from economists in a Bloomberg survey.
The world economy’s recovery from the consequences of the Covid pandemic and the war in Ukraine is increasingly hampered by governments slapping more restrictions on services trade. According to an OECD index, the average increase in new measures across all sectors was five times higher in 2022 than in the prior year.
Germany wants to intensify cooperation with Japan to help secure supplies of raw materials as part of a wider effort to make supply chains more resilient and avoid over-reliance on single countries. Raw-material security and linking the two nations’ strategies will be top of the agenda at upcoming talks. There’s growing concern about China’s dominance of refining and manufacturing capacity, which is seen as a vulnerability due to political tensions.
Two Southeast Asian central banks took divergent monetary paths this week, with Indonesia halting its policy tightening as price gains eased and the Philippines sticking with outsized interest-rate moves to tame still-hot inflation. African nations Rwanda, Namibia and Zambia also lifted borrowing costs.
–With assistance from Philip Aldrick, Siegfrid Alegado, Andrew Atkinson, Patrick Gillespie, William Horobin, Ran Li, John Liu, Ditas Lopez, Michael Nienaber, Yoshiaki Nohara, Reade Pickert, James Regan, Alex Tanzi, Randy Thanthong-Knight, Ott Ummelas, Jorge Valero and Erica Yokoyama.
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