Digging into US data anomalies: micro-businesses + tax avoidance - February G3 Leading Indicator Watch

The majority of inputs into our various country inflation/growth LEIs are now improving quarter on quarter, creating cyclical upside risks for inflation surprises and commodity prices.

New ideas: abnormally low US tax receipts linked to temporary Covid tax policies, US micro-businesses as explanation for  inconsistency of labor data, first positive signs of end to manufacturing inventory cycle distortions

Watching: US consumers reporting much worse personal finances but not worried about jobs, US shelter CPI is clearly biased lower but markets too relaxed on cost-push inflation

• US: the past year is somewhat unique in history, with a big fiscal deficit AND very low household saving. The fiscal impulse is neutral again.  
• China: a L-shaped bottom still means things are NOT getting any worse. The PBOC has been expanding its balance sheet with a jump in the “other loans to depository corporations”.
• Eurozone: growth leading indicators are improving in unison. Disinflation still main trend, but first signs of services inflation rebounding.