Charting Global Economy: U.S. Income Growth Primes Spending Pump

U.S. consumer spending, personal income and business investment gathered pace at the start of the year, helped in part by government spending that’s dwarfing the price tag of such support in European countries.

In Japan, excess household savings have the potential of propelling spending once pandemic-related uncertainty begins to lift in earnest.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:

U.S.

Charting Global Economy: U.S. Income Growth Primes Spending Pump

Personal incomes soared in January as Americans received another round of pandemic-relief checks, helping to re-charge the economy with the strongest spending advance in seven months.

Charting Global Economy: U.S. Income Growth Primes Spending Pump

Businesses are also spending. Shipments of non-defense capital goods minus aircraft, a figure used to calculate equipment investment in the government’s gross domestic product report, jumped in January.

Europe

Charting Global Economy: U.S. Income Growth Primes Spending Pump

The European Central Bank’s balance sheet has expanded more under 15 months of Christine Lagarde’s presidency than it did during Mario Draghi’s eight-year term.

Charting Global Economy: U.S. Income Growth Primes Spending Pump

While the U.S. rushes toward a blockbuster fiscal stimulus package to accelerate its recovery from the coronavirus crisis, much of Europe is pootling along in the slow lane. JPMorgan Chase & Co. estimates the “fiscal thrust” -- the boost from discretionary government spending minus the drag of expiring tax breaks and support measures -- will add 1.8% to U.S. output this year. For the euro zone, it’ll subtract 0.1%.

Charting Global Economy: U.S. Income Growth Primes Spending Pump

Millennial Londoners are leaving the capital for good as Covid-19 changes lifestyles and working patterns. Almost one in four of those age 18-44 surveyed by the Future Strategy Club said that they had permanently moved away due to the pandemic, rising to 30% of 25-34 year olds.

Asia

Charting Global Economy: U.S. Income Growth Primes Spending Pump

Japanese households are sitting on an unusually large pile of savings that could fuel spending once uncertainty from the Covid crisis starts to abate.

Emerging Markets

Charting Global Economy: U.S. Income Growth Primes Spending Pump

After an epic collapse last year, oil prices have tripled since April, raising inflationary pressures in emerging markets. Some central banks will have to respond, but analysis by Bloomberg Economics finds that most economies will be spared: Still, Brazil and Nigeria could increase borrowing costs to stem the oil-fueled price gains, while India, Mexico and Turkey face a higher likelihood of delayed rate cuts.

Charting Global Economy: U.S. Income Growth Primes Spending Pump

Thousands of striking truck drivers in Myanmar protesting the military coup have slowed delivery of imports, trapping cargo containers at ports and prompting at least one international shipping line to halt new orders.

World

Charting Global Economy: U.S. Income Growth Primes Spending Pump

After a drop in January amid high infection rates and stricter containment measures, economic activity in major economies has picked up in February, according to Bloomberg Economics gauges that integrate data such as mobility, energy consumption and public transport usage. Still, it remains some way below end-2020 levels in a number of countries.

Charting Global Economy: U.S. Income Growth Primes Spending Pump

The Philippines, Thailand, Mexico, Spain and Italy faced the biggest net losses in the world when airports and hotels closed because of the coronavirus, according to calculations by Bloomberg Economics of the world’s largest 40 economies. That means those countries can look forward to the biggest recouped gains when the Covid crisis finally ends.

Charting Global Economy: U.S. Income Growth Primes Spending Pump

Government borrowing from markets in the world’s richest economies surged by a record 60% in 2020, with an increasing reliance on short-term funding that intensifies refinancing risks, the Organization for Economic Cooperation and Development said.

©2021 Bloomberg L.P.

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