With employment increasing by less than 250,000 last month and other incoming data disappointing, the recovery appears to be losing momentum even faster than our already-below consensus forecasts imply. The slowdown initially reflected the fading of the fiscal stimulus, ongoing supply shortages and the detrimental impact that the related surge in prices has had on households’ purchasing power. But the weakness in employment suggests that the Delta variant is now weighing on domestic demand, while its spread across South-East Asia, and the resulting factory closures, means that supply shortages could get even worse too.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services