Charting the Global Economy: 2021 U.S. GDP Off to Strong Start
Here’s what happened in the world economy this week.
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A flurry of consumer spending helped the U.S. economy gain more altitude at the start of the year, in contrast to Europe where the pandemic is keeping a recovery grounded.
In Japan, manufacturing remains robust even amid headwinds that include a global chip shortage and the government’s coronavirus countermeasures.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
A key measure of U.S. demand in the government’s initial estimate of first quarter gross domestic product -- final sales to private domestic purchasers -- registered the second-strongest pace of growth since the 1980s. Against a backdrop of leaner inventories, the annualized 10.6% jump suggests output will remain robust in coming quarters.
Thanks to a surge in federal government fiscal relief payments, personal incomes vaulted ahead by more than 21% in March, providing Americans with added spending power.
Forty years ago, President Ronald Reagan and Federal Reserve Chairman Paul Volcker oversaw a root-and-branch restructuring of the U.S. economy. Today, Joe Biden and Jerome Powell are trying to do the same thing -- only in reverse. Biden is reasserting the role of government spending and taxation in the economy -- first with the $1.9 trillion relief bill approved in March, and now with proposals to spend more than $4 trillion on public investments
The euro zone tipped into a double-dip recession in the first quarter, highlighting the cost of slow coronavirus vaccinations that have left the economy lagging far behind the U.S.
London’s housing crunch is one reason why the coronavirus spread so fast and killed so many more in the U.K. than in other nations. Britain, especially in places like East London, is much more densely populated than countries like New Zealand and Sweden, which so far have escaped with lower death tolls.
A gauge of China’s manufacturing industry slipped in April and the services sector also weakened, suggesting the economy is still recovering but at a slower pace.
Japan’s factory output unexpectedly rose in March signaling greater resilience amid a state of emergency and a chip shortage that suggests manufacturers weathered the first quarter much better than initially feared.
All eight emerging Asian economies, including India and Indonesia, are seen holding benchmark interest rates steady through 2021, according to the median forecasts from Bloomberg surveys of economists.
The South American drought that’s helping push corn and soybean prices to multiyear highs isn’t just threatening crops, but also the ability to haul them on waterways that are drying up.
Emerging-market currencies are the most mispriced, according to a Bloomberg Economics’ model that estimates fair values based on economic fundamentals.
A trawl of 30 years of market and company data shows that the world’s biggest firms are doing great -- but that might not be such good news for everybody else, according to research by Bloomberg Economics. One expression of the rising power of corporate giants is greater ability to resist the call of the tax man. Reflecting the combined impact of lower tax rates and ruthless tax optimization strategies, the median effective tax rate for the world’s biggest firms has halved -- dropping from 35% in 1990 to 17% in 2020.
The Covid-19 pandemic had a greater economic impact for women due to over-representation in industries hardest hit by the crisis. Women around the world lost at least $800 billion in income in 2020, according to estimates by Oxfam International.
An OECD report showed the economic disruption from the Covid-19 pandemic combined with heightened concerns about health and finances is fueling demands for greater government spending in most of the world’s richest countries. That’s despite an awareness it could mean more tax.
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