Charting the Global Economy: U.S., Europe Inflation Accelerates
(Bloomberg) -- Inflation in the U.S. and euro area accelerated by more than expected, adding fuel to a global debate over how long the spike in prices will last.
Supply-chain bottlenecks weighed on manufacturing activity in Europe and China, while factory output surprised to the upside in the U.S. And global food costs are at risking of soaring again.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
A measure of manufacturing expanded in September at the fastest pace in four months, bolstered by robust demand for factory goods and more inventory. The data suggest manufacturers are making some headway working through still-elevated order backlogs, but persistent shipping challenges continue to elongate delivery times.
A closely watched measure of inflation rose the most on an annual basis in three decades, fueling concerns that price increases will last longer than expected and eventually hit consumer spending. And while spending -- which accounts for about two-thirds of gross domestic product -- rose in August, the downward revision to the prior month points to “only a scant gain” in third-quarter outlays, according to a note from Wells Fargo & Co.
Inflation in the euro area accelerated more than expected to the highest level in 13 years, adding fuel to a debate over how long the post-crisis spike will last. The core measure, which strips out volatile components such as food and energy, climbed to 1.9%, a rate not seen since 2008.
European manufacturers are increasingly strained by global supply-chain problems that are pushing up prices and may last well into next year. A gauge by IHS Markit measuring business activity at factories fell the most since April 2020. Growth in new orders, output and employment slowed considerably.
The U.K. economy emerged from the winter lockdown more strongly than previously reported, but not nearly enough to claw its way back to its pre-crisis size this year. Gross domestic product rose rose 5.5% in the second quarter instead of the 4.8% earlier estimated.
Activity in China’s vast factory sector contracted in September for the first time since the pandemic began, the latest sign of deceleration in the world’s second-largest economy.
Fuel oil stockpiles in Asia’s storage hub of Singapore dipped to its lowest since September 2019 as more demand emerged from the power sector amid a pre-winter surge in gas prices.
Chile’s economy grew faster than expected in August as relaxed mobility restrictions, billions of dollars in government stimulus and early pension withdrawals fueled demand.
Colombia raised interest rates for the first time in five years, following in the footsteps of all the other major inflation-targeting economies in Latin America struggling to curb a surge in prices.
Global food costs are at risk of soaring again as China faces a challenging harvest season due to a severe energy crisis. Over the past year, China had to import a record amount of agricultural products due to a domestic shortage, driving prices and global food costs to multi-year highs. In Brazil, a drought is making the situation worse.
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