Jobs Report, Food-Supply Problems, Inflation Surprises: Eco Day

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Welcome to Friday, Americas. Here’s the latest news and analysis from Bloomberg Economics to help you start the day:

• It’s U.S. jobs day. Bloomberg Economics expects the non-farm payroll report to show a solid pickup in December hiring and a decline in the unemployment rate to levels nearing the Fed’s long-run neutral rate
  • Treasuries are off to their worst-ever start to a year and there’s every prospect Friday’s payrolls data will cause the selloff to accelerate
• Federal Reserve policy makers could start to raise their target interest rate as soon as March and shrink the central bank’s balance sheet as a next step in response to surging inflation, Federal Reserve Bank of St. Louis President James Bullard said
• The highly contagious omicron virus variant is disrupting already stressed food supply chains, sickening so many workers that more shortages at grocery stores are all but certain
• Chile’s consumer prices rose more than expected for the sixth straight month as billions of dollars in pandemic spending stoked a record-breaking economic boom
• Peru raised interest rates for a sixth month as inflationary pressure mounts amid the economy’s strong rebound from the pandemic
• Argentina raised its benchmark interest rate for the first time in more than a year as it faces calls from the International Monetary Fund to tighten monetary policy
• Inflation in the euro region accelerated beyond already record levels, defying expectations for a slowdown and complicating the task for European Central Bank officials who insist the current spike is temporary
• Mario Draghi’s possible shift to become Italy’s president risks reminding investors how the country is never far away from political instability
• China’s central bank has fueled expectations it will ease monetary policy early this year with its vow to take proactive action to stabilize growth in 2022. A growing number of economists are predicting it will cut banks’ required reserves as well as policy interest rates in the first quarter
  • China’s strict Covid-19 strategy is set to inflict more economic pain

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