Global economy – yes, it’s growing

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The Recession Status Map below, courtesy of Moody’s Analytics Dismal Scientist, aggregates growth statistics from around the world and allows one to see at a glance which economies are in recession, at risk, recovering or expanding. Click here on the map to link to the interactive version. Following the “Great Recession”, it is clear that most countries are either recovering or expanding.

Source: Moody’s Analytics Dismal Scientist

The map seems to be consistent with the results of the latest Survey of Business Confidence of the World by Moody’s Economy.com: “Global business confidence is ending the year with the global economy growing at a rate consistent with the low end of its potential. It is encouraging that the current round of European debt problems has not had a measurable impact on sentiment.”

I considered in a recent post the ability of stock markets to anticipate the fortunes of the underlying economies, and concluded: “The S&P 500 leads the … the U.S. economy by approximately four months,” pointing to an improved global economic outlook for the first quarter of next year. The conclusion regarding non-U.S. economies was similar.

Another way of gauging the economic climate is to study the price movements of a few economically-sensitive commodities. As seen below, oil, copper and lumber have all recently made new highs (for the move in the case of oil and lumber and an all-time peak for copper), boding well for the global economy. Yes, I take the point of massive liquidity finding its way to the commodity markets, but solid economic growth numbers in many commodity-gobbling countries also strongly come into the equation.

Source: StockCharts.com

Source: StockCharts.com

Source: StockCharts.com

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