Global activity growth has bounced back to 2.6 per cent, compared to a low point of 2.2 per cent a few weeks back. Much of this recovery has occurred in the advanced economies, with our nowcast for the United States showing a particularly marked rebound after more than 12 months of progressive slowdown.
It would be wrong to place too much importance on a single month's data, especially when the nowcasts are heavily influenced by business and consumer surveys. But the early indications are encouraging.
These surveys have remained mixed, but downward momentum has been partly reversed in most advanced economies, especially in the US where the regional Fed surveys for March have been identified by the nowcast models as major upside surprises. In fact, sentiment had become so pessimistic that even slightly better data have represented positive surprises relative to economists' expectations, according to the Citigroup Surprise Indices.
These better numbers still leave the global economy growing at 0.7 per cent below trend, so spare capacity in the world system is still rising, and long term underlying inflation pressures should therefore still be dropping.
Better, but still not very good, is this month's verdict. Full details of this month's nowcasts are attached.
More . . . .
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Download the attached appendix here: