“While global economic conditions are more stable than [during] the depths of the European sovereign debt crisis late last year, underlying economic conditions are still fragile and fluid in many parts of the world, which could affect consumer confidence and spending momentum for the coming quarter.” –Venkatesh Bala, chief economist at
Trying to get a handle on the direction of the global economy right now is much like trying to figure out which way a soccer ball will bounce on a wet, bumpy field. One minute you think the ball is heading for the goal, but then the very next it takes an awkward (and very unexpected) bounce left or right, leaving you wide of the net.
Look at some of the most recent trend data, for example. On the one hand, according to a recent global survey conducted by
Indeed, in the U.S., consumer confidence rose nine points to 92, its highest level since before the ‘Great Recession’ while China’s consumer confidence increased two points to 110, its highest level since the inception of Nielsen’s index in 2005.
“Households around the globe experienced brighter personal situations in terms of jobs and personal finances last quarter, especially in the U.S. and
Yet other recent data streams are not so rosy – not by a long shot. For instance, after five straight months of gains, the Credit Managers’ Index (CMI) slipped to 55.1 in April from 56.2 in March. While the decline is not drastic and – excluding February and Marc – the CMI rests at a high spot, April has not been a month to write home about, noted
For the last few weeks, analysts have been trying to decide whether the economy is on the edge of another spring swoon, he explained – repeating a slide that occurred at a similar time period in 2011 and 2010.
“A lot of the factors are not the same as they were in either of these years, but the data that has emerged in the last week didn’t inspire much confidence or enthusiasm,” Kuehl said. “The growth in jobs has slowed and people seem to be getting laid off again. The latest durable goods orders are not looking good and there was some pretty gloomy prognostication coming from the Federal Reserve.
While he cautioned that the numbers are not suggesting an imminent crisis, with nothing approaching the return to recession in the U.S. as what’s being experienced in
“There has been nothing as dramatic as last year’s earthquake in
The good news, Kuehl said, is that the all the metrics that make up the CMI are still above the 50 mark denoting expansion. “But the bad news is that there are several factors with readings between 50 and 50.7,” he stressed. “It is a very fragile situation and it will not take much to push these numbers into contraction territory.”
Small business owners, for one, are not taking any of this lightly according to the most recent
“Many owners of small and medium-sized businesses appear to be optimistic, but are taking a guarded approach to business operations,” noted
Although 56% expect sales increase through year-end, only 38% plan to add new employees, while 56% said they’ll maintain the same number.
The economy was still listed as the leading short-term concern by 68% of the business owners
For the longer-term,
However, in spite all of that, the survey found concerns about the health of the U.S. economy dropped to 57% compared to 73% in November last year.
That’s quote an uncertain mix of metrics, to be sure – ones that don’t paint a clear picture at all which way freight volumes might go. Thus, like any good soccer player knows, it’s time to stay up on one’s toes and be ready to bolt in any the direction the unpredictable ball might bounce.
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|Source:||Penton Business Media|