The economic recovery
The unemployment data are once again a good sign of economic recovery. For the first time in 14 years, during the month of October unemployment has fallen in Catalonia, where unemployment has fallen for the eighth consecutive month. Normally the effect of the end of the summer tourist season makes October, in terms of employment, a bad month. This time this trend has been broken. It is true that we still have more than 42,000 people on furlough who are not counted as unemployed - a fact that forces us to qualify our optimism - and that it will be in the coming months when we will see if these furloughed workers end well or badly. But even so, the trend is positive, to the point that the overall Catalan labour radiography is now better than it was before the pandemic. Affiliation to Social Security, ie job creation, has also been strung this month, with 21,171 new jobs, the second strongest growth in October since 2004 began the historical series.
Another element that must be taken into account is that the economic recovery is taking place despite the global shortage, generated by the logistical lack of control of containers and the transit of goods and by the increase in the price of fuel, which is slowing down some productive sectors due to a lack of raw materials or components (the automotive industry is one of those affected). And to this must be added, in addition, the slow return of tourism due to a covid that refuses to give up. The cautious maintenance of the restrictions against the pandemic, in force until four days ago, has meant an added difficulty for tourism. The point, however, is that despite the shortage, and despite this strategy of staggered deconfinement, the Catalan economy is recovering quite well in the field of job creation, one of its Achilles' heels.
On the other side of the scale, inflation is soaring, largely due to the price of energy. This is also a factor that is having a negative impact on many sectors and, moreover, can blow up household savings and, therefore, end up discouraging consumption. In any case, from the European Central Bank, its president, Christine Lagarde, believes that inflation is temporary, and does not see it as a concern; in fact, its stimulus programme for the pandemic ends in March. And just yesterday, in the U.S., the Federal Reserve announced that it will begin to withdraw stimuli, with the idea that they will end completely in the summer. We will have to see what impact this decisive change in the Fed's monetary policy has on both the US and Europe.
In any case, in order to know which way the balance of the recovery will tip, we will have to see, in the short term, how dynamic the Christmas campaign will be, and we will have to wait and see how both the pandemic and the shortages evolve over the course of 2022. At the national level, it will also be crucial to reach a good agreement on labour reform, with maximum consensus and which gives confidence to the different economic agents. And in the field of the public sector, it will be essential to eventually approve the budgets of both the State and the Generalitat, as they would provide elements of stability and activate investment. And the same can be said of good management and a good distribution of the Next Generation European funds. So, good news, but watch out for prices and potential shortages.