Column-Global business cycle is in transition: Kemp
By John Kemp
LONDON (Reuters) — 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).
The acceleration is consistent with data from purchasing managers surveys showing service sector activity increased in the third quarter after the barest of slowdowns during the second quarter.
Manufacturing activity continued to decline but there were clear signs it was approaching a cyclical trough with expansion imminent.
Chartbook: Global economy and trade
Initial claims for unemployment benefits have trended lower since the start of July after rising throughout the first six months of the year.
Service sector prices rose at an annualised rate of 5.2%
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