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The youth unemployment rate in China has increased from 15% to 20% over the past year, and once the economy reopens after covid, many of these jobs will be coming back, see chart below.
Source: NBS, Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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With cash in checking accounts being less sensitive to interest rates, the bottom line is that it will require many more Fed hikes to cool down the economy because consumer spending is driven not only by borrowing but also by the amount of liquid cash households hold in bank accounts. In other words, it is going to take some time before overall consumer spending starts to meaningfully slow down.
Note: Bloomberg, Apollo Chief Economist 
Source: Consumer Expenditure Survey, Haver Analytics, Apollo Chief Economist 
Source: FRB, Haver Analytics, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Daily data for restaurant bookings continues to show no signs of a slowdown, see chart below. Our weekly Slowdown Watch chart collection is available here.
Source: OpenTable, Apollo Chief Economist See important disclaimers at the bottom of the page.
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50.5% of US households have retirement assets, and the median balance per household is $65K, and the average balance is $255K.
For more, see Table 1 in this new paper from Congressional Research Service.
See important disclaimers at the bottom of the page.
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The pandemic has had a permanent negative effect on labor supply, and this is a crucial reason why there are worker shortages and, therefore, why wage pressures are so intense, see charts below. There is little the Fed can do about this other than continue to destroy demand.
Source: BLA, Haver, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Total US employment is now back at pre-pandemic levels, but the jobs recovery has been very uneven across sectors, with total employment significantly below February 2020 levels in clothing stores, furniture stores, and electronics stores, see tables below. This is in contrast to the jobs recovery in warehouses, couriers, and air transportation, where employment levels today are substantially above pre-pandemic levels.
Source: BLS, Apollo Chief Economist See important disclaimers at the bottom of the page.
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One way to measure a country’s competitiveness is to look at how much wages are rising adjusted for productivity gains, and the chart below shows that since the financial crisis wages have increased much faster than productivity in Germany. The bottom line is that Germany is becoming less competitive relative to the rest of Europe.
Source: OECD, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The 22 million jobs lost during the pandemic have now been recovered, see chart below. Total US employment at 153 million jobs is now back at the level seen before the pandemic in February 2020.
Source: BLS, Apollo Chief Economist See important disclaimers at the bottom of the page.
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IMF: Natural Gas in Europe: The Potential Impact of Disruptions to Supply
https://www.imf.org/-/media/Files/Publications/WP/2022/English/wpiea2022145-print-pdf.ashx
IMF: The Economic Impacts on Germany of a Potential Russian Gas Shutoff
https://www.imf.org/-/media/Files/Publications/WP/2022/English/wpiea2022144-print-pdf.ashx
IMF: Market Size and Supply Disruptions: Sharing the Pain of a Potential Russian Gas Shut-off to the European Union
https://www.imf.org/-/media/Files/Publications/WP/2022/English/wpiea2022143-print-pdf.ashx
See important disclaimers at the bottom of the page.
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The employment report for July shows that the US economy is still not showing any signs of slowing down. With financial conditions easing, the Fed will have to continue to raise rates aggressively to cool down the economy, see chart below. Our set of daily and weekly indicators for the US economy is available here.
Source: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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