As the International Business Times reports, solid employment gains in the USA have decreased the jobless rate to its lowest level in almost three years and a stabilizing of business activity in December even suggest global growth at the start of.
Besides, increase of oil prices on Iran nuclear tensions is also cast a shadow. However, the economic data is currently providing some reassurance that a gradual strengthening in the United States will cause slow but steady global growth.
“I guess we have a hunch that things will start to go a little bit better than expected, or at least not dramatically down,” said Tal Shapsa, global economist for Barclays Capital.
A global factory index counted by JPMorgan had unexpectedly grown in December to 53 from 52 the prior month. A services sector index also strengthened.
Shipping measures, on the contrary, have steadied. The Baltic Dry Goods Index (BADI) which fell down in November, has leveled out though it remains stuck at crisis-era lows.
It allows seeing sort of an early window into global demand by measuring shipping costs for iron ore, cement, grain and other raw commodities.
Almost in the same way a basket of global commodity prices has moved upward since the second part of December, even after the recent rise in oil was fixed, suggesting some of the late 2011 pessimism about global demand is dissipating.
Air freight traffic, which the International Air Transport Association claimed to pick up in November by 0.5 percent after months of contraction, also looks to have firmed in December.
FedEx and UPS reported strong activity to be noticed last month on shipping of consumer electronic goods from Asia, such as IPhone 4 smartphones, and robust online shopping in the holiday season.
Financial Officer Alan Graf told analysts last month that instability of trade flows is “as high as it’s ever been and we think it’s going to be the new normal.” He also called business inventories as a sign of uncertainty.
Truckmakers’ plans, which are also full of expectations, show similar caution. Sweden’s Scania is cutting output this year by 15 percent due to recession in Europe and uncertainty over Brazil. Volvo, its top competitor, also has decreased European production.
“There is a lot of caution in the air right now. We had a lot of false starts to the recovery (in 2010 and in 2011). The recovery is positive but just barely, and is it sustainable?” said Charles Clowdis, an economist at IHS Global Insight.
Trade data this week will probably confirm the global slowdown of late 2011.
Chinese imports are expected grow to 17 percent from 22.1 percent the prior month, while export growth held steady around 13 percent. Japan’s current account fell 74.7 percent in November, as manufacturers battle yen strength.
However, data on the U.S. trade gap for November on Friday is seen little changed at around $45 billion. More attention will be drawn to the retail sales report for December on Thursday.
Early reports indicate modest spending over the holiday season for a 0.3 percent gain, says the International Business Times.