The OECD is predicting a global slowdown. No major economy is exempt.
Now that shouldn’t come as a surprise to anybody. At the end of October it said that the US economy would grow by only 1.8% next year. And Europe got a worse report. Its growth was projected at 0.3%.
In its latest reading, US growth slowed only slightly, as did China’s. On the other hand, the OECD’s composite leading indicator (CLI) for Europe, India and Brazil sharply declined.
None of this is surprising. The mainstream media might even be tempted to spin it into good news for the US. Its CLI went from 101.5 to 101.2. That’s not much of a slip but it still says that the US’s economic recovery is losing momentum. That is bad news but, as I said, not unexpected.
From Canada’s Globe and Mail…
None of the world’s major economies will escape a slowdown, the Organization for Economic Co-operation and Development said on Monday, highlighting increasing signs that growth momentum is dwindling across the board.
The Paris-based organization’s composite leading indicator (CLI) for its members fell for the seventh straight month to 100.4 in September, down from 100.9 in August and hitting the lowest reading since December 2009.
Readings for individual countries and big developing world economies were broadly lower at levels indicating slowdowns, and were in many cases below their long-term averages.
“Compared to last month’s assessment, the CLIs point more strongly to slowdowns in all major economies,” the OECD said in a statement.
The OECD CLIs are designed to anticipate turning points in economic activity relative to trend — a turnaround in an indicator tends to precede turning points in economic activity by around six months.
The Group of Seven’s CLI fell to 100.6 in September from 101.1 in August while the reading for the euro area dropped to 99.1 from 99.9, well below its long-term average of 100.
Economic momentum in the United States eased only slightly, according to the OECD’s indicator, which fell to 101.2 from 101.5.
In a report released at the end of last month, the OECD slashed its 2012 growth estimate for the United States to 1.8 per cent from 3.1 per cent and cut its forecast for growth in the euro area next year to 0.3 per cent from 2.0 per cent in May.
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