Global Data Pod

This week brings a set of March data that underscores the forces buffeting the global expansion and the supports that are helping to cushion it. European inflation and US payrolls point to a huge purchasing power squeeze that is being offset by robust job growth. The global PMIs show the shocks falling differently around the world, with Asia feeling the brunt (so far) from China’s zero-COVID lockdowns. Central banks are still looking beyond the near-term downsides and we revise up rate forecasts for the Fed, ECB, and BoE.

Speakers:

Bruce Kasman

Joseph Lupton

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

Featured in this podcast are Hiroshi Ugai and Ayako Fujita. Japan’s economy has long faced deflation and disinflation; in this it has been an outlier globally. Unlike in other DMs, reflationary feedback between a tight labor market and inflation has failed. However, the repercussions of the COVID-19 pandemic and especially Russia’s invasion of Ukraine may change that, as other nations limit Russia’s participation in global energy markets, and Japan likely will accelerate the use of high-cost renewable energy to compensate for the loss of fossil fuels, and focus more on economic security than economic efficiency. The resulting persistent input cost pressures could prompt firms to change their price-setting behavior, supported by accommodative macroeconomic policies, and allow Japan to exit its disinflationary equilibrium. While recognizing the caveats that this scenario assumes that the global economy will return to above-trend growth after 1H22 and there will be no premature signal of normalization of the monetary and fiscal policy, we discuss the prospects for Japan’s persistent disinflation to end over the medium term.

This podcast was recorded on Mar 31, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at https://jpmorganmarkets.com/research/content/GPS-4043640-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

The global economy is being buffeted by two related shocks – a spike in inflation magnified by Russia’s invasion of Ukraine and a large increase in global bond yields sparked by the hawkish pivot by the Fed. There is a risk that we underestimate the size of these shocks, with the greatest concern linked to the potential for Russian energy supply to Europe to be shut off. In addition, there is concern that these two developments could interact and generate financial stress. To date, financial conditions are tightening as interest rates rise but there are no clear pressure points of stress raising unusual concerns.

Speakers:

Bruce Kasman

Michael Hanson

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

Bruce Kasman is joined by Nora Szentivanyi and Raphael Brun-Aguerre to introduce our monthly Global Inflation Monitor which details CPI performance through February.  While pressures from energy price shocks related to the Russia invasion were an important source of the 0.6%m/m February CPI increase, food and core price pressures have been building broadly (with the notable exception of China). 1Q22 Global core inflation ex. Turkey and China is tracking at its fastest pace of increase in over thirty years (5.6%ar). Inflation pressures are prompting central banks to tighten policy, but the squeeze in household purchasing power associated with this spike poses a threat to global growth. While we have already shaved 2.5% off our 2022 Euro area GDP forecast there is risk of a much sharper drop if the conflict pushes energy prices substantially higher. A number of low-income EM economies face a large terms-of-trade loss and building domestic political unrest due to surging food prices inflation. An important offset to this squeeze is materializing as governments use fiscal supports to cushion income losses. Outside the US, we look for at least 0.5%-of GDP in additional fiscal support this year. 

 

Speakers:

Bruce Kasman, Chief Economist and Head of Global Economic Research

Nora Szentivanyi, Senior Economist

Raphael Brun-Aguerre, Senior Economist

 

This podcast was recorded on March 24, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4041230-0  for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

 

In this podcast we investigate the strength of Brazil’s labor market. In particular, we use the formal jobs quits rate to gauge labor demand in the country. We find that labor market conditions have tightened beyond the reported official labor data in the last couple of years.

This podcast was recorded on March 21, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4036404-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

Near-term risks to growth remain skewed to the upside on inflation and to the downside on growth, but the early-year data continue to show a resilient global expansion. Our global GDP nowcaster is tracking twice our forecast for 1.5%ar growth this quarter. While ready to act nimbly should growth falter, central banks are looking through the risks and on a path to normalize.

Speakers:

Bruce Kasman

Joseph Lupton

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

Despite growth downgrades amid surging inflation, the global economy is still expected to expand at a trend-like pace in 1H22. This is keeping central banks focused on normalization. The ECB was hawkish this week and next week’s Fed is set to lift off.

Speakers:

Joseph Lupton

Michael Hanson

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

Nora Szentivanyi is joined by Olya Borichevska, Jessica Murray and Joe Lupton to discuss gender gaps in labor market performance and how women have fared in the recovery from the pandemic.

Concerns over labor market scarring have been especially pronounced for women, who experienced an outsized hit during the 2020 recession compared to men, both in absolute terms and relative to previous recessions. This has raised concerns about structural change and potential scarring that could set back female labor performance.

While the recovery has seen the gender gap close in DM economies, women’s recovery has lagged in EM. We explore the reasons for this divergence and discuss what recent global developments mean for female labor and global labor markets more generally.

Speakers

Nora Szentivanyi, Global EM Economist

Olya Borichevska, Global Economist

Jessica Murray, EMEA EM Research

Joe Lupton, Managing Director, Global Economic Research

 

This podcast was recorded on March 8, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4014692-0 and https://www.jpmm.com/research/content/GPS-4019923-0.pdf  for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

 

Events are unfolding rapidly and yet uncertainty is still high and rising. This week, we mark down growth and raise inflation outlooks around the world but this may not yet be enough. Beneath the surface is a healthy global expansion, but it will be put to the test in the coming months.

Speakers:

Bruce Kasman

Joseph Lupton

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

We view the macro economic impact of Russia’s invasion of Ukraine largely through the lens of the energy sector where Russia accounts for more than 10% of global production. So far, sanctions have spared the energy sector and potential additional supply is in the offing from Iran. While risks will remain high – and risk premium maintained in crude oil and natural gas prices – this week’s events are prompting modest downward revisions to growth and upward revisions to inflation forecasts.

Speakers:

Bruce Kasman

Jahangir Aziz

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.