Charting the Global Economy: Inflation Steadies in Latin America

(Bloomberg) -- Consumer prices in Mexico and Brazil -- Latin America’s largest economies -- rose in early December by less than forecast, backing off from near-20 year highs.

Inflation metrics continued to flare in the U.S. and Europe, where central banks have yet to start raising rates. Consumer spending in the U.S. stagnated last month as price pressures continued to build.

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

U.S.

Consumer spending, adjusted for inflation, stagnated in November as the fastest price gains in nearly four decades eroded purchasing power. The personal consumption expenditures price gauge, which the Federal Reserve uses for its 2% inflation target, increased 0.6% from a month earlier and 5.7% from November 2020, the highest reading since 1982.

Europe

European economies are facing a potentially crippling setback to their nascent recoveries if the worsening energy crunch forces many more factories to halt or curb operations. Power and gas prices have hit record highs across the continent as unscheduled nuclear shutdowns in France, reduced supplies of Russian natural gas and winter demand push producers to their limits.

Asia

Chinese banks lowered borrowing costs for the first time in 20 months, foreshadowing more monetary support to an economy showing strain from a property slump, weak private consumption and sporadic virus outbreaks.

Taiwanese companies, which led the charge into China decades ago when the mainland opened to overseas capital, have been scaling back for years because of higher labor costs and more local competition. Beijing’s move last month to punish one of the island’s firms for its political connections threatens to accelerate that.

Emerging Markets

Mexico’s annual inflation slowed more than expected in early December, as a new central bank governor prepares to take office amid questions about the institution’s independence.

Brazil’s consumer prices rose less than expected in early December, adding to hopes that inflation is finally cooling down after hitting an 18-year high last month. 

World

Omicron is dealing a blow to the world economy just as the pandemic enters its third year as a drag on growth and driver of inflation. According to the latest Bloomberg nowcasts, the global economy is expanding just 0.7% in the final three months of the year, half the pace of the previous quarter and below the rate of around 1% witnessed right before the crisis.

The global push toward electrified transport has fired up consumption for lithium and the battery material’s prices have more than tripled this year to a record. Miners are scurrying to expand capacity, but they can’t keep up with demand and market tightness is likely to persist in the near term. 

©2021 Bloomberg L.P.