Today's Economy

Inflation is causing wage growth to accelerate.

Even without additional legislation, government support to household income will remain above prior trends.

A Russian invasion would cause energy prices in Europe to spike.

Sales remained impressive even after adjusting for inflation.

Commentary

The Mexican economy underperformed in November, while Brazil saw its unemployment decrease.

We don't expect big moves by the ECB, but the BoE will hike rates.

Security risks loom over the promise of a new free-trade agreement.

We expect that December’s reading is close to peak for the HICP and that consumer prices will begin moderating in early 2022.

Today's Economic Indicators

Norway
Retail Sales
Dec. 2021: -2.8% m/m
Norway’s retail sales excluding motor vehicles and auto fuels ended the year on a sour note, tumbling 2.8% m/m in December and wiping out the 0.8% gain made in November.

France
Household Consumption Survey
Dec. 2021: 0.2% m/m
Household consumption of goods slowed to a 0.2% m/m increase in December from November's 0.8% m/m rebound.

Hong Kong SAR (China)
GDP
2021Q4: 4.8% y/y
Hong Kong's economic growth slowed in the fourth quarter, according to advance estimates, with real GDP expanding by 4.8% y/y, down from 5.5% growth in the prior quarter.

Sweden
Retail Sales
Dec. 2021: -4.4% m/m
Sweden’s retail sales excluding auto fuels dropped 4.4% m/m in December following a 0.7% increase in November.

Sweden
Unemployment rate
Dec. 2021: 8%
Sweden’s seasonally adjusted unemployment rate declined to 8% in December from 8.3% in November.

Euro Zone
Business and Consumer Sentiment
Jan. 2022: 112.7
The euro zone’s economic sentiment indicator decreased by 1.1 points in January and now stands at 112.7, after easing by 2.2 points in December.

Belgium
Consumer Price Index
Jan. 2022: 7.6% y/y
Consumer price growth in Belgium surged in January, rising to 7.6% y/y from 5.7% y/y in December.

Ireland
Retail Sales
Dec. 2021: -3.1% m/m
Irish retail sales excluding motor trades dropped by 3.1% m/m in December after a 1.8% m/m increase in November.

Portugal
Retail Sales
Dec. 2021: 7.3% y/y
Portuguese retail sales fell 2.3% m/m in December and marked the first month-to-month decline since July.

Brazil
Employment Situation
Nov. 2021: 11.6%
Brazil’s unemployment adjusted down in November as job creation advanced a little further.

United States
Employment Cost Index
2021Q4: 1.0% q/q
The Employment Cost Index rose 1% in the fourth quarter of 2021, a bit weaker than expected and a slowdown from the record-setting pace of growth in the third quarter.

United States
Personal Income
Dec. 2021: 0.3% m/m
Personal income grew 0.3% in December, slightly weaker than our expectations of a 0.4% increase.

United States
PCE Deflator
Dec. 2021: 0.4% m/m
The Federal Reserve will have zero tolerance for any upside surprises to inflation this year, but the good news is that our baseline says inflation has peaked.

United States
Real Personal Spending
Dec. 2021: -1.0% m/m
Real consumer spending fell sharply in December, though the weakness is likely overstated.

United States
Moody’s Analytics & CNN Business Back-to-Normal Index
January 26: 88.9
The Omicron variant of COVID-19 remains a heavy drag on the Moody’s Analytics & CNN Business Back-to-Normal Index.

United States
University of Michigan Consumer Sentiment Survey
Jan. 2022: 67.2
U.S. consumer confidence dipped to a cyclical low in January under the weight of increased COVID-19 infections, according to the final report from the University of Michigan.

Colombia
Monetary Policy
Jan. 2022: 4.00%
Colombia’s central bank hiked the reference interest rate by 100 basis points to 4% at Friday’s regular meeting.