Below is a chart and brief excerpt from today's Early Look written by Macro analyst Christian Drake.
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The risk(s) associated with a choppy recovery in employment is probably duration dependent. To the extent we get some version of an uneven labor recovery, it opens up the potential for a lower-amplitude, longer-period cycle. In short, while it probably cultivates elevated macro chop in the near-term, it also probably increases the odds that the growth cycle endures for longer. Globally, prevailing conditions suggest a similarly supportive evolution. The U.S. is clearly on the lead edge of large-scale vaccination and reopening efforts with other DM and EM in successive tow. This will continue to provide for a staggered recovery – a kind of progressive reopening on a global basis characterized by a progressive renormalization in global supply chains and a progressive build in external demand. This staggered cadence is preferable to a globally synchronized renormalization impulse (and the attendant “overheating” and policy reaction implications) with respect to the prospects for a protracted reflationary cycle as ROW renormalization will work to resolve domestic demand-supply imbalances while also helping propagate. |
