Global Data Pod

Featured in this podcast are Ben Ramsey, Cassiana Fernandez, Gabriel Lozano, and Diego Pereira. In this podcast we review our economic outlook for Latin America in 2022, a year in which we see many challenges amid prospects for high inflation, tightening monetary policy, slowing growth, and significant political and electoral uncertainty.  In particular, we focus on the main questions we’ve been getting during our conversations with investors as we kick off the new year.

This podcast was recorded on January 20, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-3968916-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.

 

Featured in this podcast is Hiroshi Ugai and Ayako Fujita. Since Japanese firms’ wages have barely increased for 20 years, currently the Japanese government is planning to introduce many measures like a tax incentive, moral suasion, and selective wage increases to accelerate Japanese firms’ wage growth. The government expects that these measures will lay the foundation for future economic growth, and that a large rise in wages would also contribute to a sustainable rise in prices. We discuss the impact of these measures, and find that these measures are unlikely to work under the current high labor income shares and firms’ still cautious price-setting behavior in the face of the huge increases in energy and commodity prices. We think persistent labor shortages or policies to boost labor productivity such as through promoting digital transformation (DX) would have more impact, though it would take time to reap results.

This podcast was recorded on Jan 20, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at https://jpmorganmarkets.com/research/content/GPS-3966542-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

Momentum continues to soften as consumers took a breather through the holidays. Downgrades this week point to 1Q21 being the weakest of the expansion. We see the Omicron wave as a concentrated drag that will reverse in later quarters. But elevated inflation and a faster-than-expected normalization in labor markets is challenging the view of a gradual path of monetary normalization around the world, and this should temper the expansion. 

Featured in this podcast is Bruce Kasman and Joseph Lupton.

This podcast was recorded on January 14, 2022.

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.

Bruce Kasman is joined by Joe Lupton to discuss recently published research showing that factory output is rebounding and sending encouraging signs that the bottlenecks holding back activity are easing. Evidence is emerging from the global PMIs and a range of transportation price measures. Even more encouraging is the robust recovery gathering steam in Asia, a goods-centric region at the center of the supply chain bottlenecks, and the motor vehicles sector where global output fell 25% over the first nine month of 2021. While final demand is growing at a modest pace, the strong desire to replenish depleted inventories has pushed global factory output gains to a double-digit annualized pace in the last three months of 2021.

The evolving spread of the Omicron variant looks likely to slow this recovery and generate a significant, synchronized drag on global growth this quarter. Our view is that services will bear the brunt of the near-term drag and that it is unlikely that there will be a significant renewal of manufacturing sector supply constraints. If right, manufacturing will take the lead in global growth this quarter as inventory replenishment continues.

 

This podcast was recorded on January 12, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-3968 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

Marco Protopapa and Malcolm Barr discuss the economic and political outlook for Italy in the light of the forthcoming choice of a new president.

This podcast was recorded on January 11, 2022.

This communication is provided for information purposes only.  Institutional clients can view the related report at www.jpmm.com/research/content/GPS-3965695-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

The global recovery is experiencing a fading of the supply shocks that damped growth last year but now facing a new resiliency test in the form of Omicron. We expect industry to weather the storm better than services, a view supported so far by the December PMIs, and for the economy as a whole to fare better than prior COVID waves. Central banks are keeping their eyes on normalization, and we now see the Fed hiking in March and beginning balance sheet roll-off in July.

 

Speakers:

Bruce Kasman

Joseph Lupton

This  was recorded on January 7, 2022.

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.

Bruce Kasman is joined by Raphael Brun-Aguerre, Joe Lupton, and Nora Szentivanyi to discuss the near-term inflation outlook. Global CPI inflation accelerated sharply last quarter to an estimated 5.9%ar, approaching its fastest pace over the past quarter century. This acceleration was accompanied by a notable broadening of price pressures. While a broadening of price pressures often signals a sustained upward shift in inflation but we believe it is appropriate to fade last quarter’s acceleration and look for a significant drop to a 3.5%ar in 1Q22. 

 

It is easy to forecast a deceleration in energy inflation as a natural gas price shock is starting to fade. Forecasting the trajectory of core inflation is more complicated as goods and services prices face different COVID -related cross-currents. In all, we forecast core inflation to stabilize this quarter. But for the first time in a year, we assess risks at the start of the quarter as skewed towards a downside surprise. In contrast to last year’s COVID waves, it is unlikely that the Omicron wave derails the gradual relaxation of global supply constraints now underway. Its potential drag on service-sector demand thus poses the greatest near-term risk.  

This podcast was recorded on January 5, 2021.

This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-3961435-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.

A very busy week in monetary policy watching delivered a set of central banks that are intent on starting down the path of normalization sooner than anticipated earlier this year but with a sense that the journey will be incremental. The implicit hope is for a soft landing that returns labor market to full employment while containing inflation. In the near-term, our baseline sees growth and inflation slowing early next year. The current quarter is looking strong but the new COVID-19 threat poses downside risks to 1Q21 GDP and two-sided risks to inflation.

Speakers:

Bruce Kasman

Joseph Lupton

This podcast was recorded on December 17, 2021.

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.

Bruce Kasman is joined by Michael Feroli, Allan Monks, Joe Lupton, and Greg Fuzesi to discuss this week’s DM central bank policy meetings. Although the Fed, Bank of England, and ECB moved on different fronts, each is accelerating its normalization process while emphasizing that there is no need to move very far. While we believe the Bank of England and Fed will raise rates three times next year, neither central bank is guiding toward a full normalization of stances over 2022-23. In a similar vein, the ECB announced an end to PEPP in March but suggested that policy rates are likely to remain on hold through 2022.

This podcast was recorded on December 16, 2021.

This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-3953141-0, www.jpmm.com/research/content/GPS-3952359-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.

With pandemic headwinds building, the latest resiliency test to hit the global recovery is not over. However, current quarter outturns continue to impress, with trade numbers out of Asia pointing to a reintegration of supply chains and data out of US, German, and Japan auto sectors showing a rebound. Consumer spending is on the rise, showing notable resilience to multi-decade high inflation that is likely to fall back next quarter—expanding purchasing power. DM central banks are taking note and looking past near-term pandemic risks and down the path to normalization. Next week’s Fed expected to accelerate tapering, telescope lift-off, and boost the hiking pace.

Speakers:

Bruce Kasman

Joseph Lupton

This podcast was recorded on December 10, 2021.

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.