Global Data Watch_ Something certain to tell you confusion has its costs. Sat Feb 08 2025

Summary of Key Points from J.P. Morgan Global Economic Research Call Industry Overview - The report discusses the global economy, focusing on growth and inflation trends, particularly in the United States and Western Europe [2][3][11]. Core Insights and Arguments - The global economy is starting the year with above-potential growth and elevated inflation, despite mixed signals from recent reports [2][11]. - The global all-industry PMI and US employment gains have moderated, but both indicate encouraging growth momentum [2][11]. - A recovery is noted in the manufacturing sector and Western Europe, with the PMI showing an upward trajectory in orders and employment [2][11]. - Western European inflation is expected to moderate, but recent reports suggest that the pace of disinflation may have been overstated [3][11]. - The US CPI is anticipated to show firm core inflation at 0.23% month-over-month, with headline inflation influenced by food and energy prices [3][11]. - The Trump administration's policies are expected to influence economic performance, with a balance between curtailing trade and reducing the tax burden on businesses [4][11]. - Risks remain regarding the potential for unbalanced trade policies, which could negatively impact business sentiment and economic growth [5][11]. Important but Overlooked Content - The report highlights the potential for tariffs to act as a tax on household purchasing power, which could dampen consumer confidence [20][11]. - The manufacturing sector is experiencing a noisy lift, with a 4% annualized jump in factory output, but caution is advised due to risks of a global trade war [22][23][11]. - Euro area risks have been trimmed, with Germany showing improvement in industrial data, although concerns about a US trade war persist [26][11]. - The report discusses the implications of tariff increases on Mexico and Canada, suggesting that if 25% tariffs are imposed, both economies could slide into recession [20][11]. - The report anticipates a gradual increase in tariffs on China, potentially reaching 60% by the second half of 2025, which could alter growth profiles significantly [27][11]. Economic Forecasts - The report provides GDP growth forecasts for various regions, with the US expected to grow by 2.8% in 2025 and Canada by 1.3% [29][11]. - Inflation forecasts indicate a divergence between the US and Euro area, with the US experiencing higher inflation rates [15][16][29][11]. This summary encapsulates the key points from the J.P. Morgan Global Economic Research call, focusing on the current economic landscape, potential risks, and forecasts for growth and inflation across different regions.