The advanced world picks up at start of H2 2013

Stock markets around the world head towards new highs. And this is not surprising because recent economic data and surveys suggest that there has been a pick-up in activity in the advanced capitalist economies last month.   Despite weak employment figures in the US last week and very weak GDP figures for Q2 (see my post, https://thenextrecession.wordpress.com/2013/07/31/the-us-economy-bigger-but-not-healthier/) , it seems that the US had a better July.

My measure for US economic activity – a combined ISM index for manufacturing and services sectors – ticked up in July.

US ISMs Jul 13

The more frequent but less reliable ECRI weekly indicator of US economic activity also supported that trend.

ECRI Jul 13

And for the first time since 2010, the purchasing managers’ indexes (PMIs) for the major economies all rose, even in the Eurozone, which is no longer contracting.  The UK PMI in particular leapt forward after several quarters of stagnation, if not contraction.  Indeed, the pace of expansion is the fastest since 2006..

ISM Combined Jul 13

But don’t get carried away, like the stock markets are.  The PMIs just show the pace of expansion or contraction not the level of manufacturing output or services growth or decline.    All the UK PMI shows is that the UK economy is growing at last after stagnating.   Indeed, real GDP growth is still likely to be little more than 1% this year.  And UK manufacturing is hardly cracking along.

BRAfeooCEAAHBbN.png large

At the same time, manufacturing PMIs for key emerging economies indicate that the pace of growth is slowing, not accelerating.

PMIBrics-e1375713089295

Overall, world GDP growth is modest at best, with the average real growth rate well below that before the crisis.

PMIGlobal-e1375713157872

4 Responses to “The advanced world picks up at start of H2 2013”

  1. Daniel Rocha Says:

    Today, the NYSE, inflation adjusted, is higher than in Oct 2007 and Aug 2001.

    http://www.financialsense.com/contributors/doug-short/nyse-margin-debt-and-the-spx

    Yesterday, it closed at 15.470,67. They are close to an all time high. Also, there seems to be a huge accumulation of credit.

    How can you be optimistic at all? The place, China, where manufacturing happens at the largest scale, had a huge deep in the last 3 months. It seems people are buying credit and cancelling orders.

    Too much products on the market. I think this time we will see the 1st recession in capitalist China, now with a commodity basis.

  2. Daniel Rocha Says:

    The NYSE is here:

    http://inflationdata.com/Inflation/Inflation_Adjusted_Stock_Price/NYSE_Inflation_adjusted_stock_price.asp

  3. Daniel Rocha Says:

    Although the SP 500 is already reaching peaks higher than in 2007….

  4. vallebaeza Says:

    Reblogueó esto en Econo Marx 21.

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