--- title: "Economic Outlook: Week of April 26, 2021" description: "Every week, Flexport Chief Economist Phil Levy gathers the most relevant news for the global trade community. Track major world economies, see what the latest indices reveal, and keep up with the…" language: en canonical: https://www.flex.thisisbrew.com/blog/economic-outlook-week-of-april-26-2021/ lifecycle: live --- # Economic Outlook: Week of April 26, 2021 Every week, Flexport Chief Economist Phil Levy gathers the most relevant news for the global trade community. Track major world economies, see what the latest indices reveal, and keep up with the facts and figures that could impact your business. Here’s the economic news you need for the week of April 26, 2021. Let’s start with a chart. This week, it’s the US Dollar Trade-Weighted Index. After an initial strong appreciation with the onset of the pandemic, the US dollar has generally depreciated against the currencies of major trading partners. The last reported figure of 112.8 on April 16 was down 1.9% from the beginning of 2020 and 10.9% from its recent peak of 126.5 on March 23, 2020. A depreciation makes US exports appear less expensive to foreign buyers and imports appear more expensive. *Source: St. Louis Fed *[FRED](https://fred.stlouisfed.org/graph/?g=DqTK)* and Board of Governors.* The depreciation is puzzling in some ways. While the pace of US economic recovery has been slower than that of China, the recent [IMF World Economic Outlook](https://www.imf.org/en/Publications/WEO/Issues/2021/03/23/world-economic-outlook-april-2021) forecast US GDP growth to be faster than all advanced economies except Spain, which was tied with a 6.4% forecast growth rate. Further, the yields of some key US [bonds](https://www.cnbc.com/quotes/US10Y) have been steadily rising since last summer. These factors would normally strengthen a currency. The key countervailing force pushing for depreciation is likely the US Fed [commitment](https://fredblog.stlouisfed.org/2020/11/from-inflation-targeting-to-average-inflation-targeting/) to higher US inflation. ## Economic Developments **PMI Numbers Gain Strength Around the World** Optimistic purchasing manager indices showed strength in multiple markets. [US numbers](https://www.markiteconomics.com/Public/Home/PressRelease/22fc73216cf444c9b5443bb2a535091e) showed a record level, [Euro Area](https://www.markiteconomics.com/Public/Home/PressRelease/7344c5db768b4d27a4174697c342ec50) figures hit a 9-month high, and [Japan](https://www.markiteconomics.com/Public/Home/PressRelease/8724638f32394a1dbc5953e5d8f5f6b3) showed expansion. **Jobless Claims Hit Recent Low** The US initial unemployment insurance [claims](https://www.dol.gov/ui/data.pdf) figure was 547K, the lowest since March 14, 2020. **National Debts Are on the Rise** In both the US and the Euro Area, aggressive fiscal measures have pushed up debt as a share of GDP. In the [US](https://www.cbo.gov/system/files/2021-03/56977-Data-Underlying-Figures.xlsx), from 2019 to 2020, debt rose from 79.2% to 100.1% of GDP. In the [Euro Area](https://ec.europa.eu/eurostat/documents/2995521/11563047/2-22042021-AP-EN.pdf/19f07f1a-49dd-29be-fbf0-857dc423519f?t=1619026271193), it rose from 83.9% to 98.0%. While there is nothing magical about 100% debt to GDP, it has traditionally been a threshold of [concern](https://www.stlouisfed.org/open-vault/2020/october/debt-gdp-ratio-how-high-too-high-it-depends). For the US, the levels are near WWII [peaks](https://www.cbo.gov/publication/56977#section1). **US Business Exits Are Better than Expected** US business failures are not as bad as feared, according to a [Fed study](https://www.federalreserve.gov/econres/feds/files/2020089r1pap.pdf). While official data arrives with a substantial lag, preliminary data suggest high levels of exit were concentrated in very small firms in specific industries and did not represent a large share of US employment. Looking ahead, exit expectations were below historical rates in most industries. ## Political Developments **European Central Bank Leaves Policy Steady** The European Central Bank met and announced it would maintain its [policy rate](https://www.ecb.europa.eu/stats/policy_and_exchange_rates/key_ecb_interest_rates/html/index.en.html) at -0.5% (in place since Sept. 2019) and its heightened rate of bond purchases. ECB President [Lagarde](https://www.cnbc.com/2021/04/22/ecb-decision-april-2021.html) said Q2 economic performance looked better than Q1, but highlighted uncertainty. **US-EU Tariff Tensions Linger** While the Biden administration suspended aircraft-related tariffs last month, it has left Trump [steel tariffs](https://www.washingtonpost.com/us-policy/2021/04/17/biden-steel-tariffs-trade/) in place. This past week, Harley-Davidson announced it would face [broader EU tariffs](https://www.wsj.com/articles/harley-davidson-hit-with-eu-tariff-ruling-plans-appeal-11618831853) as a result. [President Biden](https://www.ft.com/content/d8dd9999-2a6b-4aca-9a90-1257e6d6bff1) announced he would travel to the UK and Belgium in June, allowing talks on such matters. For more economic insights, follow [@philipilevy](https://twitter.com/philipilevy?lang=en) on Twitter or check out Flexport’s The State of Trade [webinars](https://www.flexport.com/webinars). *Please note that the information in our publications is compiled from a variety of sources based on the information we have to date. This information is provided to our community for informational purposes only, and we do not accept any liability or responsibility for reliance on the information contained herein.* --- *This is a markdown version of [https://www.flex.thisisbrew.com/blog/economic-outlook-week-of-april-26-2021/](https://www.flex.thisisbrew.com/blog/economic-outlook-week-of-april-26-2021/) for AI/LLM consumption.*