Global Monthly – Are labour shortages for real?

The global economy continues to rebound rapidly following the easing of lockdown measures.This month, we upgrade both our eurozone and US GDP growth forecasts for 2021.One possible spanner in the works for the recovery is a potential looming labour shortage.We find that despite signs of a shortage, aggregate labour demand is still well below pre-pandemic levels, and this will likely be met with ample supply once government support measures are eased.Regional updates: in the eurozone, economies are bouncing back after an early easing of lockdowns, and in the Netherlands, improving confidence points to a sharp rebound in consumption.In the US, goods consumption is easing, but this should be offset by the services recovery.Cost pressures continue to rise in China, prompting a policy response from Beijing.