US jobless claims fall to lowest level since 1969 as US economy grows 2.1% – as it happened
- US initial jobless claims fall to 199,000 in latest week; GDP revised higher
- UK factories struggle to meet record demand as supply issues continue
- German business confidence worsens, suggesting stagnation or recession
- French business confidence improves
- UK wine and spirits firms warn of Christmas booze shortage
- Closing summary
Carsten Brzeski, global head of macro at ING, says the risks of stagnation or even recession for Germany at the turn of the year have clearly increased.
Over the last few days, Germany has already introduced some stricter restrictions but is still far away from the Austrian situation. This could change soon. Not only has Austria been a very good leading indicator for what will happen in Germany in terms of infections and government measures, this morning’s news that the SPD, Greens and FDP have come to a coalition agreement could also bring change.
Germany’s reaction to the fourth wave has suffered from a power vacuum, with the caretaking government not wanting to decide on stricter measures and the incoming government not ready yet, and possibly not really wanting to start a new era with tighter restrictions. The expected press conference of the leaders of the probable new government this afternoon could shed some light on potential next restrictions and measures.
In German manufacturing, the index fell as companies assessed their current business as considerably worse. Their expectations, by contrast, brightened somewhat, especially due to developments in the automotive industry. Supply bottlenecks in intermediate products and raw materials still have a grip on the manufacturing sector and a majority of companies plan to raise prices.
Sentiment in the service sector deteriorated noticeably. Skepticism grew substantially, especially as regards expectations. The last time the expectations indicator saw such a heavy decline was in November 2020. However, service providers were less satisfied with their current situation as well. The fourth coronavirus wave caused expectations to plunge especially in the tourism and hospitality industries.
