Inflation pressures rise

<p>Kia ora,</p><p>Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news of new inflation risks from the dramatic Suez Canal blockage that will upset most global supply chains.</p><p>But first in the US, there was a sharp drop in <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20210574.pdf" target="_blank"><strong>initial jobless claims</strong></a> last week, falling more than -100,000 to 657,000 and the lowest in a year. In addition there were 242,000 Pandemic Unemployment Assistance claims filed, also a very sharp reduction. (Interestingly, exactly a year ago, the first of the huge spikes in claims started with almost 3 mln people filing claims then in one week.) There are now 3,870,000 people still on these benefits. This is very much lower than analysts were expecting.</p><p>The next regional factory survey, this one by the <a href="https://kansascityfed.org/surveys/manufacturing-survey/tenth-district-manufacturing-activity-grew-solidly/" target="_blank"><strong>Kansas City Fed</strong></a>, shows the solid expansion well embedded with strong new order growth. But this latest survey continues the reporting that input costs are rising fast and most firms say they can pass most of them on.</p><p>The Atlanta Fed's <a href="https://www.frbatlanta.org/cqer/research/gdpnow" target="_blank"><strong>GDPNow forecast</strong></a> has the US economy growing at +5.4% pa in March.</p><p>The US Treasury had <a href="https://www.treasurydirect.gov/instit/annceresult/press/preanre/2021/R_20210325_3.pdf" target="_blank"><strong>a big bond tender</strong></a> for its benchmark 7yr Note and the yield rose to +1.3% pa and well above its prior 1.195%. US$150 bln was tendered for the US$73 bln that was accepted. Today's result takes the yield back to higher than a year ago after the suppressed pandemic falls.</p><p>In the dramatic <a href="ht