ECB President Christine Lagarde said in a speech on Sunday, global “recovery is incomplete because there is still much ground to recover.” For Eurozone, a :similar assessment applies” as “incoming data show a strong recovery, but also one that is uneven, uncertain and incomplete.”
In particular, “the unevenness of the recovery is highlighted by the divergence between services and industry, in contrast to the crisis a decade ago when activity in these sectors moved in tandem”. She warned, “if the current strength of the rebound does not continue – or fails to spread across all sectors – it is unlikely that they will all be re-employed in the near term.”
She hailed that the EUR 750B Next Generation EU recovery fund “has the potential to make a significant difference to Europe’s economic trajectory over the next few year”. “Confidence in the private sector rests to a very large extent on confidence in fiscal policies,” She added. “Continued expansionary fiscal policies are vital to avoid excessive job shedding and support household incomes until the economic recovery is more robust.”
As for monetary policy, the “June recalibration” had, to a large extent, resulted in the upward revision in 2022 core inflation projections. But, “other factors, such as the appreciation of the euro have partly offset the positive pull coming from our measures.”
Lagarde’s full speech here.
US Empire State manufacturing rose to17, hours worked surged
US Empire State Manufacturing index rose to 17.0 in September, up from 3.7, beat expectation of 6.2. Looking at some details, new orders rose 8.8 pts to 7.1. Shipments rose 7.4 pts to 14.1. Price paid rose 9.2 pts to 25.2. Prices received rose 1.8 pts to 4.7. Number of employees rose 0.2 pts to 2.6. Average employee workweek jumped sharply by 13.5pts to 6.7. The worweek number was also the first positive reading since the pandemic began. Future business conditions also rose 6 pts to 40.3, suggesting some optimism ahead.
Full release here.