Charting the Economy: Central Banks Offer Band-Aid for Virus

(Bloomberg) -- The Federal Reserve and several other central banks swung into action this week with rate cuts aimed at mollifying the economic fallout from the coronavirus.

Amid the whipsaw in financial markets, U.S. jobs figures showed an economy with plenty of juice prior to a heightening of concerns about the virus. While China’s economy is beginning to stir again, data on coal consumption show production is still fragile.

Here’s some of the charts that appeared on Bloomberg this week, offering a pictorial insight into the latest developments in the global economy.

U.S.

The Fed delivered an emergency half-percentage point interest-rate cut on Tuesday, becoming the first central bank from a Group of Seven economy to lower borrowing costs this year. The central banks of Canada and Australia also reduced rates.

Employment surged in February, showing the economy was on especially solid footing before the spread of the coronavirus intensified. Payrolls rose 273,000 for a second straight month, while the unemployment rate slipped back to a half-century low of 3.5%.

Asia

Economists searching for clues on how fast the world’s second-largest economy is getting back on its feet are starting to generate a new must-watch number: The resumption rate.

One of China’s most ambitious undertakings has become a corridor to nowhere: A planned $62 billion project in Pakistan has been beset by delays and a lack of funding -- more signs of trouble for President Xi Jinping’s signature Belt and Road Initiative.

Europe

Italy’s decision to close all schools until March 15 threatens a childcare crisis for some parents of the 3.3 million pre- and primary-school pupils stuck at home during the day. Yet, with fewer than 40% of working-age women participating in the country’s labor market -- the lowest level of any European Union country -- the problem of who can mind the kids won’t be quite as acute as it would otherwise be.

There’s no full-scale attack of wealth coming, but the UK’s myriad tax breaks -- some of which mainly benefit the rich -- could be targeted in next week’s budget by a government that needs every penny to fund the biggest spending spree in years. Britain has more than 1,100 reliefs that cost more than 400 billion pounds ($517 billion) a year -- the equivalent of half of all government spending.

Emerging Markets

A fresh standoff between Vladimir Putin and Recep Tayyip Erdogan isn’t just testing the fragile alliance that has allowed Russia and Turkey to work together in the Middle East, but also threatening the two countries’ deeply entrenched economic ties. Turkish farmers were the biggest losers of the last trade in 2016 spat as Putin used a ban on fruit and vegetables to help domestic businesses investing in food production.

Brazil’s polemic president capped off his first year in office falling short on promises to crank up growth in Latin America’s largest economy. The big question now, as global headwinds intensify, is whether he missed his window.

World

Christine Lagarde’s appointment to lead the European Central Bank was a landmark event in improving gender diversity in economic policy making, but global central banks still have a long way to go: Just 14 are female-led, representing less than a third of the world economy.

--With assistance from Andrew Atkinson, Sophie Caronello, Natasha Doff, Miao Han, Mario Sergio Lima, Sheridan Prasso and Jill Ward.

To contact the reporters on this story: Zoe Schneeweiss in London at zschneeweiss@bloomberg.net;Vince Golle in Washington at vgolle@bloomberg.net

To contact the editors responsible for this story: Simon Kennedy at skennedy4@bloomberg.net, Vince Golle

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