How to measure inflation during a pandemic?


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How do you measure the effect of rising prices when normal consumption patterns have been completely disrupted by a global pandemic? This is the theme of the day in the last installment of our series: Inflation: a new era?

Statistical authorities typically use a basket of goods and services to monitor the amount spent on everyday goods but also on items such as restaurant visits and thefts – consumption that has been massively reduced by the pandemic restrictions. .

The way these elements are weighted can seriously skew the reading. In the euro area for example, the weights are updated every year in January, so that year’s calculation will place less emphasis on things like gasoline, hotels and restaurants that have been affected by blockages last year. This means that even if consumers return to pre-pandemic spending habits, official statistics will underestimate spending in these areas.

This lack of clarity makes political targeting even more difficult for central bankers, who already suffer from a breakdown in consensus on how best to encourage low and stable price growth.

Other indicators are increasingly being considered. The used car market, for example, is closely watched by the US Federal Reserve.

And those who are convinced that this new era of inflation is already upon us have a lot of ammunition. Yesterday’s UN data, for example, showed that global food prices rose 40% in May, the biggest monthly increase since 2011.

Mondial economy

Some of the 47 Japanese companies that have together paid more than $ 3 billion to support the Tokyo Olympics – the most sponsored sporting event of all time – fear getting less for their money unless matches are postponed to allow more spectators to attend. The Japanese population, for their part, cooled the spectacle amid continued coronavirus infections and a slow vaccination program.

Today closely watched non-farm payroll data showed that the United States created fewer than 559,000 jobs than expected in May and that the unemployment rate fell to 5.8%. Yesterday, separate data showed new jobless claims were falling to a pandemic era low.

EU trade chief Valdis Dombrovskis told the FT he wanted to see vaccine manufacturing raised rather than backing US-backed proposals for patent lifting, ahead of a crucial World Trade Organization meeting on June 8-9. Brussels wants to remove export restrictions and use existing WTO rules on intellectual property to facilitate licensing. The United States yesterday unveiled details of its intention to donate millions of spare doses as part of its bid to become “the world’s vaccine arsenal.”


A “trendy national treasure” sausage roll Gregg or a salad of crayfish and avocado Ready? Leisure journalist Alice Hancock examines the UK lunch battle between the two major take-out chains amid changing main streets and commuter habits.

Thanks to a successful US vaccination program, “World of Concrete 2021” marks the return of trade shows to Las Vegas, where $ 11.5 billion in convention activity is crucial for a city hard hit by the pandemic. Event companies across the country are excited about the return of physical shows, or as one industry executive put it, “Virtual shows honestly don’t deliver the kind of value our customers are looking for.

Can readers be tempted to return bookstores now the blockages are coming to an end? Columnist John Gapper reports the story of an Englishman trying to lure Americans away from Amazon and bring them back to Barnes & Noble.


US stocks rose, the smaller-than-expected rise in the we jobs helped allay investor fears that the economy was overheating and that the Fed would start pulling its stimulus measures. In Europe, the regional Stoxx 600 index remained close to the highest records recorded at the start of the week.

the US Federal Reserve is to start selling the corporate bonds and fixed income funds it bought last year as part of its emergency program to help businesses borrow more cheaply. Although reliance on the Secondary Market Business Credit Facility, or SMCCF, has been low, the Fed said simply pledging its support helped markets get back to functioning after the initial pandemic panic.

Spaghetti Alphabetti May 27

Foreign investors bought record highs of UK government debt over the past year, according to new figures from the Bank of England, helping to finance a massive increase in borrowing to fund pandemic measures. UK assets have a relatively high yield compared to economies such as the Eurozone or Japan, where government debt is trading at sub-zero yields.

Line graph of changes in UK government debt holdings (in billions of pounds sterling) showing foreign investors buying gilts at a record pace

Have your say

Keine Lust comments on the reopening of the hospitality industry in England fails to increase retail footfall in May:

The evidence is that shopping as a leisure activity has not resumed. It is not yet clear whether this should be cautioned with an “yet”. A structural shift in some demographics that hadn’t bought much online before the pandemic towards much more widespread adoption could mean it will never return to where it was. The connection between going to retail stores and dining out is based on this day of leisurely shopping and the custom of chain restaurants. Another thing is targeted purchases with high conversion rates. And the meal side is a specific (and planned) trip in and of itself after so long without being able to make it and the need to book a specific time, with a lot more emphasis on local pubs and restaurants rather than city centers. , where to eat out is usually in the middle or at the end of a leisure shopping trip.

So none of this comes as a surprise to me. Very few of the best food-focused pubs, especially those with outdoor space, which many people will always feel more comfortable with, are in or near major shopping destinations.

Final thought

Hong Kong’s real estate market is the most expensive in the world, but some top-notch properties are being abandoned. The reason? A combination of superstition, mystery, and skulduggery has led many to believe that they are haunted. . .

Rumors and ghost stories surround Dragon Lodge, located on Victoria Peak in Hong Kong © Alamy

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