Pantheon Publications

5 February 2025 Global Monitor Tariffs will lift US inflation in 2025, but by how much?

• US - A growth slowdown looms, as the saving rate rebounds
• EUROZONE - The ECB can’t dodge questions on the neutral rate for much longer
• UK - MPC preview: 25bp cut, guiding to three-to-four reductions in 2025
• CHINA+ - DeepSeek puts Chinese AI on the map; a wake-up call for investors
• EM ASIA - New headwinds amid green shoots; PH won’t do much better in 2025
• LATAM - Mexico, Colombia: mixed inflation signals amid rate cut prospects

ian shepherdson (Chief Economist, Chairman and Founder)Global

5 February 2025 US Monitor Falling job openings symptomatic of too tight monetary policy

• Job openings are still trending down; catch-up growth in healthcare hiring is fizzling out.
• JOLTS net hiring in December was more muted than payroll growth; January jobs will probably disappoint. 
• Auto sales likely were hit by bad weather in January: pre-tariff purchases probably have further left to run.

Samuel TombsUS

5 February 2025 LatAm Monitor Chile's economy shone brightly in Q4, and the outlook is positive

• The industrial and commerce sectors are driving Chile’s growth, despite persistent issues in services.
• Confidence indicators are on the mend, as activity navigates complex reforms and external pressures.
• The BCCh will have to take a cautious approach amid sluggish employment growth and high inflation.

Andrés Abadía (Chief LatAm Economist)Latin America

5 February 2025 Eurozone Monitor GDP in Switzerland rose in Q4, unlike in Germany and the EZ

• Swiss GDP likely rose by 0.9% in 2024, much better than the 0.2% decline in neighbouring Germany. 
• The US has not said it will raise tariffs on Swiss imports, but an EU-US trade tiff will still hurt slightly. 
• We continue to think the SNB easing cycle will end in March, though risks are tilted towards further easing.

Melanie Debono (Senior Eurozone Economist)Eurozone

5 February 2025 UK Monitor GDP likely unchanged in December and fell quarter-to-quarter in Q4

• We expect GDP to stagnate in December, putting growth at -0.1% quarter-to-quarter in Q4.
• Industrial production likely fell, while we expect healthcare and education to detract from growth.
• A small upward revision to November’s GDP would be enough to avoid GDP falling in Q4 as a whole.

Rob Wood (Chief UK Economist)UK

Global Datanote: US ISM Manufacturing Survey, January

• Pre-tariff upturn probably will be fleeting.

Oliver Allen (Senior US Economist)Global

PM Datanote: US ISM Manufacturing Survey, January

Pre-tariff upturn probably will be fleeting.

Oliver Allen (Senior US Economist)US

Global Datanote: Economic activity index, Chile, December, 2024

• In one line: The recovery continues, and expect further good news in Q1. 

Andrés Abadía (Chief LatAm Economist)Global

PM Datanote: Economic activity index, Chile, December, 2024

• In one line: The recovery continues, and expect further good news in Q1. 

Andrés Abadía (Chief LatAm Economist)Latin America

UK Datanote: UK Final Manufacturing PMI, January 2025

• In one line: President Trump’s tariffs will snuff out a nascent rebound in the PMI.

Rob Wood (Chief UK Economist)UK

EZ Datanote: PMIs, Switzerland, January 2025

In one line: Likely underestimating Swiss GDP growth still, and pointing to weaker inflation.

Melanie Debono (Senior Eurozone Economist)Eurozone

4 February 2025 US Monitor Unusually cold weather likely depressed January payroll growth

• We look for a 125K increase in January payrolls, well below the 170K consensus.
• Survey indicators present an incoherent picture, but unusually cold weather likely hit employment.
• The small fall in continuing claims points to a stable unemployment rate, but the risks are to the upside.

Samuel TombsUS

4 February 2025 LatAm Monitor Temporary trade-war pause signals Mexico and US will collaborate

• Presidents Sheinbaum and Trump agreed to pause tariffs, focusing on border-security cooperation.
• BanRep held interest rates at 9.5%, surprising the consensus, citing inflation and Petro-Trump tensions.
• Increasing inflation expectations and high labour costs are further threats, but BanRep will cut again.

Andrés Abadía (Chief LatAm Economist)Latin America

4 February 2025 Emerging Asia Monitor EM Asia factories in so-so shape as the new era of Trump tariffs starts

• The PMIs show that regional manufacturing is still largely waning; watch for potential US front-loading.
• Indonesia’s shockingly low January CPI was policy-induced and will reverse; it masked a jump in food.
• Fiscal policy in India will stay contractionary, but the government riskily is hoping for a pain-free FY26.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

4 February 2025 China+Monitor China likely to temper its response to the US's opening move on tariffs

• China is likely to be restrained in its retaliation to the US tariff hike announced over the weekend.
• A limited trade war is more likely than a near-term grand bargain. Goodwill gestures seem likely.
• The Caixin manufacturing PMI declined in January but held up better than the official gauge.

Duncan WrigleyChina+

4 February 2025 Eurozone Monitor A 10pp hike in US tariffs on EU imports priced in by EURUSD

• President Trump will soon impose tariffs on imports from the EU, but the details are still up in the air. 
• A 10pp increase in tariffs on EU goods is all but fully factored in by the drop in EURUSD since Q3. 
• EZ headline and core inflation beat the consensus in January; still no perfect landing at 2% in sight.

Claus Vistesen (Chief Eurozone Economist)Eurozone

4 February 2025 UK Monitor Another stagflationary shock; CPI set to rise to 2.8% in January

• We think President Trump’s tariffs, by fracturing supply chains, will be stagflationary for the UK.
• We expect CPI inflation to accelerate to 2.8% in January, 0.3pp more than the MPC expected.
• Goods inflation will slow, but airfares and private-school fees will boost services inflation.

Rob Wood (Chief UK Economist)UK

China+ Datanote: Exports, Korea, January

In much better shape than the headline suggests

Duncan WrigleyChina+