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Eurozone unemployment at record high; Norway to Buy Foreign Currency — Macro Snapshot

Eurozone unemployment fell to a record low in February as the economy continued to rebound from the COVID-19 pandemic, even as energy prices rose sharply amid preparations for the Russian invasion of Ukraine.

The EU’s statistics office, Eurostat, said unemployment in the 19 countries sharing the euro fell to 6.8% of the labor force in February, from a revised 6.9% in January.

February’s rate is the lowest since records began in 1998, just before the euro’s official launch in January 1999. Economists polled by Reuters had expected a reading of 6.7%.

Eurostat said 11.155 million people were out of work in the eurozone in February, up from 11.336 million a month earlier.

Norway’s central bank will buy foreign currency

Norway’s central bank said on Thursday it would buy foreign currency for its sovereign wealth fund in April for the first time in nearly nine years, amid rising oil and gas revenues in the country, weakening the country’s currency. Crown.

Norges Bank plans to exchange 2 billion crowns ($231.9 million) a day in foreign currency, which will in turn be invested abroad by the wealth fund, already the largest in the world with assets of $1.3 trillion.

Lower purchases of goods dampen consumer spending in the United States

U.S. consumer spending barely rose in February as higher spending on services was offset by lower purchases of motor vehicles and other goods as price pressures mounted, l annual inflation that has increased the most since the early 1980s.

The Commerce Department report released Thursday showed spending in January was much stronger than initially expected.

That put consumer spending on track for solid growth this quarter, which would keep the economy expanding, despite growing headwinds from inflation fueled by shortages.

“Despite declining confidence due to the war (in Ukraine) and inflation, U.S. consumers are holding up, supported by strong job growth and accumulating savings,” said Sal Guatieri, senior economist at BMO. Capital Markets in Toronto.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.2% last month. Data for January has been revised up to show spending rebounded 2.7% instead of 2.1% as previously reported. Economists polled by Reuters had forecast consumer spending to rise 0.5%.

A significant drop in COVID-19 infections has boosted demand for services such as restaurants, hotel stays, recreation, air travel and healthcare. Services rose 0.9% after rising 0.7% in January. But spending on goods fell 1.0% after jumping 6.5% the previous month. The decline in purchases of goods signals the rotation of spending towards services.

Sales of consumer goods in Spain rise on supply concerns

Sales of consumer goods rose 13% in Spain following Russia’s invasion of Ukraine as supply problems, exacerbated by a partial transport strike, prompted buyers to hunker down to supply basic commodities, market research firm Kantar said on Thursday.

Kantar measured sales between March 6 and March 20, compared to the same period a year ago, and their total increase far exceeded a 5% rise in prices for Spanish mass consumer products in the two same weeks, which means that sales volumes have increased.

“Spanish shoppers are starting to change their habits and this is directly linked to the concern they are showing about the current scenario,” Kantar said, adding that 90% of consumers surveyed were worried about the impact of the conflict which has started on February 24. .

Spain’s public deficit for January, less town halls, narrows

Spain’s public deficit – which includes the central government, the social security system and the regions, but not the town halls – has narrowed in the first month of 2022, the budget ministry announced on Thursday.

The deficit in January narrowed to the equivalent of 0.47 percent of gross domestic product, the ministry said, compared with 0.73 percent of gross domestic product in the same period a year ago.

The deficit was equivalent to 4.62% of GDP in the first eleven months of 2021.

Brazil’s unemployment rate at six-year low

Brazil’s unemployment rate stood at 11.2% in the three months to February, statistics agency IBGE said on Thursday, the lowest level for the period in six years, amid decrease in the number of people looking for work.

The rate showed no change between the three months and January and fell by four tenths of a percentage point between September 2021 and November 2021.

A Reuters poll of economists had forecast the jobless rate to be 11.4% in the three months to the end of February.

The Ministry of Economy stressed that job creation will support economic growth this year. But private economists continue to predict that Brazil’s economy, the largest in Latin America, will grow well below official government estimates.

Japanese PM expects BOJ to stay focused on 2% inflation target

Japanese Prime Minister Fumio Kishida said on Thursday he expects the Bank of Japan to maintain efforts to meet its 2% inflation target.

The government “will take appropriate action on monetary policies in close communication with U.S. monetary authorities and others, as monetary stability is important and sudden exchange rate movements are undesirable,” Kishida said. in Parliament, asked about the recent weakening of the yen and its impact on the economy.

Colombia’s central bank may raise rates more than initially expected

Colombia’s central bank is expected to raise its benchmark interest rate by at least 150 basis points – the highest figure in two decades – on Thursday, as policymakers around the world struggle to control soaring inflation .

A majority of analysts in a Reuters poll last week – 13 out of 16 – believed the seven-member board would raise borrowing costs to 5.50%, which would mark the biggest rise since November 1999 .

“Higher inflationary pressures, added to the rapidly narrowing output gap and large twin deficits (of the trade balance and current account), support a tighter monetary policy,” said David Cubides, economist at Itau. .

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