This post is a guest contribution by Rebecca Wilder*, author of the of the News N Economics blog.
Here in the US, markets are looking for the actual turning point, having priced in the “falling less quickly”, or the “second derivative”, story. Unfortunately, the turning points have yet to materialize in much of the domestic reports: industrial production remains in descent; housing moves laterally on the bottom; and trade is (maybe) showing some life.
However, globally the first derivative action (actual monthly growth) is more obvious: building permits in Canada were way up in May; auto sales in China continue to surprise, up almost 50% over the year; exports in South Korea are seriously less negative since 2008; and industrial production in Germany got a big May bump (almost back to 2005 levels of production). But it pretty much ends there this week: Eurozone retail sales continued to slide, -3.3% over the year in May.
Here are the global charts of the week
Finding a bottom: loss in goods export revenue is tapering off at -20% to -35% over the year
The unemployment rate continues its relentless surge in Australia and Switzerland (The chart illustrates the annual change in the unemployment rate.)
And some good(ish) news: the first derivative action
Auto sales in China are Red HOT: notice the columns are the color of the Chinese flag
China’s auto sales are up 47.7% over the year, its third consecutive increase in the annual growth rate.
Builders in Canada are planning ahead: residential and non-residential building authorization permits surged 15% and 14%, respectively, in May. Much of the residential growth was in the volatile multi-family space (single-family authorizations grew 1.4%); but new housing stock contributes to positive GDP growth.
And Industrial Production (IP) in Germany surged 3.7% in May, while UK IP fell 0.57%. But don’t get too excited: German index shows that IP levels are almost back to those seen in 2005 (four years ago).
Finally, the bad news: Eurozone retail sales struggling to make headway….
Overall, this week’s global economic reports show that the global economy is (likely) at the stabilization phase of the business cycle. Going forward, this column will be looking for global turning points in the data.
Source: Rebecca Wilder, News N Economics, July 10, 2009.
* Rebecca Wilder is an economist in the financial industry. She was previously an assistant professor and holds a doctorate in economics.
