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Inflation is still raging in the US and Europe, especially in Spain where soaring energy costs are pushing broader price gauges higher. Image Credit: Gulf News Archives

New York: Inflation is still raging in the US and Europe, especially in Spain where soaring energy costs are pushing broader price gauges higher.

US employment costs rose at the fastest pace on record in the third quarter, while euro-area inflation breached 4 per cent for just the second time ever. Japanese retail sales advanced in September as Covid cases fell, and consumers in India are spending healthily to kick off the festive season.

US

Employment costs rose at the fastest pace on record in the third quarter as companies across a variety of sectors raised wages against a backdrop of labor shortages.

Personal consumption slowed sharply in the third quarter, due in part to a drop in outlays for cars. That subtracted 2.39 percentage points from gross domestic product growth and drove the decline in goods spending in the period, as automakers had a tough time keeping dealer lots full.

Europe

Economic growth in the euro area accelerated in the third quarter following the suspension of most Covid-19 curbs, with inflation reaching the highest level since 2008.

Euro-area inflation accelerated more than expected to breach 4 per cent for only the second time ever, adding to the European Central Bank’s challenge in battling increasingly aggressive market bets for interest-rate hikes.

Spanish inflation accelerated to the highest level in almost three decades, underscoring the continent’s intensifying struggle with soaring energy costs. The rate jumped to 5.5% in October, the highest since 1992. Spain is particularly vulnerable to energy shocks as it relies on gas imports to generate electricity and power links to other European nations are limited.

Asia

Economists have again lowered their economic growth forecasts for China over the coming year amid power shortages and a worsening property market downturn, a Bloomberg survey shows.

The economic gap between China’s less-developed western region and the wealthier eastern parts of the nation widened in the third quarter as Beijing’s crackdown on property and local government debt weighed on growth.

Japan’s retail sales regained ground in September following a sharp drop the month before, an indication that shoppers felt more comfortable spending as virus infections started to fall.

Emerging Markets

India showed more signs of a recovery taking hold as its consumption-driving festive season kicked off, keeping it on track to regain the title of the world’s fastest-growing major economy. An array of indicators compiled by Bloomberg pointed to a continuing rebound in demand in September, helping keep the needle on a dial measuring so-called animal spirits steady for a third straight month.

South Korea said it will speed up the introduction of wider borrowing restrictions to curb rising household debt it called the economy’s “largest potential threat.”

World

Global supply chains will need an estimated $100 trillion in investment to achieve the planet’s goal of net-zero carbon emissions over the next three decades, according to new research that pins as much as half of that price tag on small- to medium-size businesses.

The pandemic has revived debate about the role of governments in the economy - and inflation is part of that argument. This year’s supply-chain crisis has raised questions about whether the quest for efficiency and low prices has come at the expense of stability - or even national security.