The Inflation Debate That’s Roiling U.S. Markets Faces 2021 Test
“They’re still in the minority, but investors and economists who think America is in for a bout of inflation — perhaps a serious one — start the year with some fresh ammunition for their arguments. Vaccines hold out the prospect of an end to pandemic restrictions that could bring consumers roaring back. It’s what economists call pent-up demand –- a label that applies quite literally right now. The incoming Biden administration will likely prop up household spending with more financial aid, after Senate elections this month gave Democrats a majority. And in the background, the dollar has been weakening and commodity prices rising steadily for months.”
U.K. Urged to Act Fast to Save 250,000 Small Firms in Pandemic
“At least 250,000 small companies in the U.K. are set to close in 2021 unless the government provides more assistance, threatening a further blow to an economy heading for a double-dip recession. The warning from the Federation of Small Businesses Monday comes with the country back in lockdown to contain a resurgent coronavirus, hospitals at risk of being overwhelmed and job losses mounting. Lobby groups have said the 4.6 billion pounds ($6.2 billion) of emergency aid announced by Chancellor Rishi Sunak at the start of the lockdown is short of what’s needed.”
China’s Consumer Prices Gain in December After Brief Decline
“China’s consumer prices rose in December after briefly declining in the previous month, while factory-gate deflation eased further, providing more evidence of the country’s economic recovery. The consumer price index rose 0.2% last month from a year earlier, following a 0.5% decline in November, the National Bureau of Statistics data said Monday. The median forecast in a Bloomberg survey of economists was for it to be unchanged. Factory deflation narrowed, with the producer price index registering a 0.4% decline, compared with a 1.5% drop in November.”
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