JP Morgan’s latest Global Markets Outlook provides some quick perspective on where the global economy stands.
What’s happening? Economic growth for the second half of the year is expected to be about 3% annualized, for the US, Europe, and Japan. Emerging Asia is expected to grow 7%. Overall, the world is expected to grow at an annualized 3.4% for the rest of the year.
On the US front in particular, they highlight that positive US economic surprises appear to be at a 2-year high.
In the US, where GDP is currently projected to rise at close to a 3%ar pace during 2H09, the trajectory of final demand, including consumption, housing, and business investment, is stronger than expected this quarter.
Global inflation remains in check since the 2008-2009 downturn cooled things down substantially.
The 2008-09 recession already has delivered a very big decline in core inflation across the developed world. From a peak of 1.9%oya in August of 2008, DM core inflation—defined here as the headline CPI excluding all categories of food and energy prices—fell to an estimated 1.1%oya as of July.
Retail sales have been picking up around the world.
And on the employment front, the global picture has begun improving, helped by the manufacturing rebound we wrote about previously, despite the continued challenges faced by many unemployed around the world.
Finally, and most important, unemployment rates have begun to level off. After having risen about 0.3%-pts per month from January to May, the global unemployment rate increased just 0.1%-pt in June and July. This is happening across much of the globe, including in the US, much of Western Europe, Canada, Australia, and a good number of EM economies.
Fair enough, JP is one of the more bullish houses right now, so you can discount some of their bullish view on the stock markets right now. Yet the data they refer to still holds. Overall the world has begun to look better. Now, whether this turns into a head fake…
(Sourced via JP Morgan’s “Global Markets Outlook and Strategy”, 2 Septemer 2009)