John Kemp of Reuters reports that the global business cycle is in transition. He writes:
Global economic activity was mixed during the third quarter of 2023, with distinct signs of improvement in the United States and China but continued sluggishness elsewhere.
Global industrial production was up by just 0.4% in August 2023 compared with the same month a year earlier, according to estimates compiled by the Netherlands Bureau for Economic Policy Analysis (CPB).
But trade volumes were down by 3.8% in August compared with a year earlier and have not grown for a year, a sign of stagnation that is consistent with a recession (“World trade monitor”, CPB, Oct. 25).
The United States and China, the world’s two largest economies, showed signs of growing somewhat faster in the third quarter after a pronounced slowdown in the first half of 2023.
Preliminary estimates show U.S. real gross domestic product increased at an annualised rate of 4.9% in the three months from July to September up from 2.1% in the three months from April to June.
The largest contribution came from increased consumer spending (+2.7 percentage points) especially on services (+1.6 percentage points) with a smaller contribution from goods (+1.1 percentage points). […]
In the United States, business spending on new equipment has already been hit by higher borrowing costs and uncertainty about the economic outlook.
New orders for nondefense capital equipment excluding aircraft (a proxy for business equipment spending) have shown essentially no growth in nominal terms over the last 12 months.
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