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BLOOMBERG Bloomberg New Economy Original article: https://www.bloomberg.com/news/newsletters/2022-04-26/america-inc-isn-t-worrying Peter Burgess COMMENTARY Peter Burgess | ||
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America Inc. isn't worrying
Bloomberg
Bloomberg New Economy 7:52 AM (9 minutes ago) Hello. Today we look at what the U.S. corporate-earnings season is telegraphing about recession risks, how China’s latest lockdowns may translate into some of the biggest global supply lockdowns yet and who got hit hardest in the pandemic job market. Still Sanguine American chief executives aren’t yet subscribing to fears that red-hot inflation will ultimately tip the economy into recession. Weeks after Wall Street banks kicked off earnings season by saying household finances were in good shape, Main Street firms are lining up to express confidence in the U.S. consumer even as price pressures mount, according to this story from Olivia Rockeman, Reade Pickert and Vildana Hajric.
“Any talk of recession at this point is premature,” Tractor Supply CEO Hal Lawton said April 21 — a point underscored by the calculation, by Bloomberg Economics, that there’s a zero chance the economy will contract this year. For all the public angst about inflation, it seems for now that households are keeping on shopping. And that’s critical for the economy given that consumer spending accounts for about two-thirds of gross domestic product. Still, Netflix last week showed fallout is still possible and a survey this week revealed about 40% of U.S. small businesses intend to raise selling prices by 10% or more. “Part of the inflation story is how the consumers handle it and are we going to see consumption get cut off, or will consumers just push through the higher prices and continue to consume?” said Chris Gaffney, president of world markets at TIAA Bank. “So far, it looks like consumers are shrugging off the price increases, but everybody is complaining about it.” —Simon Kennedy The Economic Scene China is suffering its worst equity selloff since early 2020 amid mounting concern that President Xi Jinping’s Covid Zero strategy is hurting the world’s second-largest economy. That spells trouble for the global economy too by paving the way towards another summer of supply shocks. As Bloomberg’s Big Take details today, Beijing’s stringent rules aimed at curbing Covid-19 have led to fresh congestion at its nation’s ports. Throw in Russia’s war with Ukraine, and the world faces a one-two punch that will fan inflation and hurt growth. A reminder: China accounts for about 12% of global trade and Covid restrictions have idled factories and warehouses, slowed truck deliveries and exacerbated container logjams. “We expect a bigger mess than last year,” said Jacques Vandermeiren, the chief executive officer of the Port of Antwerp, Europe’s second-busiest for container volume, in an interview. “It will have a negative impact — and a big negative impact — for the whole of 2022.” -------------------------------------- Need-to-Know Research When it came to inflicting economic pain, Covid-19 hurt women’s employment and their participation in the labor force more than it did for men. But the main divide was between the more- and the less-educated, according to new research by Claudia Goldin of Harvard University. The more educated could work from home, while those employed in in-person service occupations experienced large reductions in employment. Black women were more negatively affected. “The real story of women during the pandemic concerns the fact that employed women who were educating their children, and working adult daughters who were caring for their parents, were stressed because they were in the labor force, not because they left,” said Goldin. Read the full research here. Bloomberg.com Contact Us Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 Today’s Must Reads
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