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1.Market Observations, 8.Was Sticky

8 Feb 2017 (AFR) – Recovery coming despite Trump, not because of him; AFR Business Summit speaker Jim O’Neill says that the world economy is very resilient

(8 February 2017, AFR, p39, by Jim O’Neill)

‘Disconcerting political developments in the United States and Britain might lead one to conclude that an already challenged world economy will struggle even more in the near term. But as we continue into 2017, the cyclical evidence actually suggests otherwise. Since my days as chief economist at Goldman Sachs, I have kept an eye on six indicators from around the world that, taken together, provide a reliable snapshot of what the global economy will look like for the next six months. Right now, all six indicators show more promise than they have for some time, and only one of them has fallen slightly from a recent high. ‘

‘The first indicator is weekly unemployment claims in the US…’ <snipped…>

‘Similarly, the Institute for Supply Management Manufacturing Index provides a pretty good preview of the US economy for the next 3-6 months, even though…’ <snipped…>

‘A third indicator is a subcomponent of the same ISM survey: manufacturers’ new orders and inventories.’ <snipped…>

‘Looking beyond the US, a fourth indicator is the ratio of Chinese retail spending relative to industrial production (adjusted for inflation). ‘ <snipped…>

‘A fifth indicator is South Korean trade data, which is consistently reported on the first day of each month after trades occur…’ <snipped…>

‘The last key indicator is the monthly Ifo Business Climate Index in Germany, which contains useful cyclical data for Europe overall, owing to Germany’s centrality in the continent’s economy.’

Read all about it at (might need AFR login access, or try:


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