What's going on the markets? Macro update

Inflation | Economy | Wages | Exports | Imports | Consumer Sentiment | Energy crisis


The following article provides an overview of the current macroeconomic indicators.


Inflation

"Supply-driven inflation is currently contributing 2.5 percentage points (pp) more than its pre-pandemic average, while demand-driven inflation is currently contributing 1.4pp more." -FRBSF Economic Letter

Source: FRBSF Economic Letter


Inflation breakdown by components. Services' inflation continues to build in the U.S.


Wages

The good news is minimum wages have risen across Europe and the U.S.. The bad news is inflation is eroding them.

Source: Social Europe


U.S. Exports

U.S. export prices increased 18.9 percent from May 2021 to May 2022, the largest over-the-year rise since 12-month percent changes were first published in September 1984.


U.S. Imports

U.S. import prices rose 11.7 percent from May 2021 to May 2022, following increases of 12.5 percent for the year ended April 2022 and 13.1 percent for the year ended March 2022.


Consumer sentiment

EU/ OECD Consumer confidence index (CCI)

Source: Business tendency and consumer opinion surveys

U.S. University of Michigan Consumer Sentiment


Energy crisis

"Energy costs to US economy have risen sharply in the last two years, evidenced by a sharp rise in energy consumption expenditures as a percentage of wages and salaries. Both figures are reported monthly by the Bureau of Economic Analysis in their Personal Income Report. During this cycle, that burden has risen by 2.2 percentage points to just above 7%. The cost of energy goods to the economy is still relatively low versus that seen in earlier decades and even as recently as 2014. However, all recessions since 1970 have been preceded by or coincident with a noteable rise in the cost of energy." -S&P Global Commodity Insight

Russia-Ukraine conflict

"Yet the aggregate figures hide strong disparities between sectors. For example, in the wood sector, the sanctions already in place apply to all European imports from Russia (figure 2); in the energy sector (mineral fuels and oils), 78% of imports from Russia will be banned by the end of the year, an increase of over 71% compared to the fifth package. In contrast, the share of banned aluminium imports is ten times lower, at around 8%." - theconversation.com

Russia’s share in EU imports of products covered by sanctions

Source: theconversation.com


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Sources:

https://socialeurope.eu/ensuring-adequate-minimum-wages-in-an-age-of-inflation

https://www.spglobal.com/commodityinsights/en/market-insights/blogs/electric-power/062722-ctracker-china-power-generation-renewables-steel-iron-ore-us-energy

https://www.hellenicshippingnews.com/white-house-tensions-with-oil-industry-remain-high-after-productive-meeting-with-refiners/

https://economictimes.indiatimes.com/markets/cryptocurrency/a-2-trillion-free-fall-rattles-crypto-to-the-core/articleshow/92506981.cms

http://country.eiu.com/article.aspx?articleid=812197464&Country=United+States&topic=Economy_1

https://www.frbsf.org/economic-research/publications/economic-letter/2022/june/how-much-do-supply-and-demand-drive-inflation/

https://data.oecd.org/leadind/consumer-confidence-index-cci.htm#indicator-chart

https://theconversation.com/sanctions-against-russia-taking-stock-four-months-after-the-start-of-the-war-185528














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