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Next week's economics: Jan 3 - 7

Next week's numbers will show that supply constraints are easing, but that Omicron is holding back economic activity.
Next week's economics: Jan 3 - 7

The world economy is growing amid signs that shortages are starting to ease, next week’s figures might show.

In the US, the ISM survey should report rising output and orders. It could also say that backlogs of orders are starting to decline and price pressures are easing a little. Both are still problems, but perhaps less so than in the autumn.

Friday’s labour market data should confirm that the economy is growing well, with perhaps around 500,000 net new jobs created in December and the unemployment rate falling to 4 per cent – although this will still be below the 3.5 per cent rate we saw before the pandemic. The figures could also show that annual wage inflation is levelling off at just under 5 per cent, which could be a sign that mismatches between vacancies and unemployment are starting to diminish.

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