Next week could bring signs that global economic growth is slowing a little.
In the US, the ISM survey could show that manufacturing output is being held back by shortages of materials, and that consumer confidence has fallen (albeit from high levels) since the summer. In China, purchasing managers might report that output is now stagnating. In Japan, although industrial production should post a rise, the Tankan survey is likely to report that firms’ business conditions are no better than they were in 2018. And in the eurozone, the ECB is likely to say that the M1 measure of the money stock has slowed in recent months. This matters as it has traditionally been a good lead indicator of output growth. Eurozone data will also show that the unemployment rate, at around 7.5 per cent, is still well above its pre-pandemic low of 7.1 per cent.
We might see a similar story in the UK. The Bank of England could report that consumer credit has been weak in the last two months, following a post-lockdown surge. This corroborates the message from official retail sales data, suggesting that the post-lockdown increase in demand has not been as strong as some expected.