Countries that are relatively far advanced in their vaccine rollout plans, including Israel, the UK and the US, may give us clues about the strength of the recovery that lies ahead in other major economies. Data released last week showed that the US added close to one million jobs in March. Were that pace to be maintained, nonfarm payrolls would return to pre-pandemic levels by the end of this year. On Monday of this week, we learned that the ‘business activity’ component of the non-manufacturing ISM reached 63.7 in March, the strongest reading since the survey began in the late 1990s. And the ‘prices paid’ component pointed to a more rapid increase in prices than at any time since the Global Financial Crisis. This was no ordinary recession, and it will not be an ordinary recovery either, particularly in those economies that have put in place generous fiscal support packages. As we have been telling our clients during an ongoing series of forecast presentations, the risks around official forecasts for growth and inflation, most of which assume households unwind the savings they have built up during the pandemic smoothly over the remainder of their lifetimes, lie clearly to the upside.
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