Not-So-Bleak Numbers
IHS Markit’s indicator of global growth rose in February from a 28-month low and, encouragingly, there was an improvement in the gauge of demand. Its measure of worldwide services also picked up in February for the first time in three months. Citigroup’s surprise index for the euro area -- which has been one of the weak spots of the global economy -- has rebounded to its best reading in almost five months.
In China, a measure of new orders in the manufacturing Purchasing Managers Index improved last month, and Germany got good news about an increase in water levels on the River Rhine. A drop last year disrupted barge traffic, hitting industry and adding to the temporary factors that pushed the economy near a recession.
Trading Places
Investors have been keen to blame political discord, and especially the global trade war, for prompting businesses and consumers to retrench. One measure of unpredictability in 20 countries entered the year at a record level.
But U.S. President Donald Trump decided against imposing another round of tariffs on China on March 1 and there are signs that he and Chinese President Xi Jinping may soon be able to strike a trade deal. A model designed by the Institute of International Finance to track U.S. trade in real time showed signs of stabilizing from early this year.
“Global trade fears are overblown, as are concerns that global growth may slow significantly,” according to Robin Brooks, the IIF’s chief economist.
Labor Gains
Even with February’s disappointing U.S. employment report, the global labor market continues to tighten, providing reason to hope consumers will keep spending. JPMorgan Chase & Co. estimates unemployment in developed nations is now at a 40-year low of 5 percent and set to fall further. That has the bank predicting wages will grow 3.2 percent in the final quarter of this year, the fastest for any point in the decade-long expansion and almost a percentage point faster than the same period of 2017.
New Perspectives