Global Markets Overview: February 2022

The US labour market has continued to tighten and supports the interest rate tightening cycle in 2022

• The unemployment rate in the US fell to 3.9% at the end of 2021, slightly below the Federal Reserves’ and our estimate of ‘full employment’ of 4%.
• Overall, tightness in labour market conditions and above-target inflation are consistent with the policy rate tightening cycle in the US beginning in 1H 2022.

Chinese economic growth remained robust over 2021, although authorities have recently eased policy to support growth.

• GDP growth in China was 8.1% in 2021, well above authorities’ official target of ‘6% or more’. Nevertheless, momentum in growth slowed over the second half of 2021, largely due to weakness in retail sales and the property sector.
• In response, Chinese authorities have signalled cyclical support for growth in the near-term in preference to longer-term structural reforms.

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Author

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David Hoile

Global Head of Asset Research at WTW

David is the Global Head of Asset Research at WTW, responsible for economic and capital market research. He also is a member of the Investment Assumptions Committee, who help guide investment policy globally.

email Email phone +44 20 7170 2144

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