More signs of global economy accelerating

The outlook for the global economy continues to be positive.

Last week, the Organisation for Economic Co-operation and Development reported that its composite leading indicator for members as a whole rose to 102.8 in November from 102.6 in October, indicating an increasing pace of economic expansion. It noted that the United States and Japan were among those showing clear signs of accelerating economic activity.

OECD composite leading indicators
	Ratio to trend, amplitude adjusted					Change from previous month
	2010					2010
	Jul	Aug	Sep	Oct	Nov	Jul	Aug	Sep	Oct	Nov
OECD area	102.3	102.3	102.4	102.6	102.8	-0.1	0.0	0.1	0.2	0.3
United States	101.6	101.6	101.8	102.2	102.7	-0.1	0.0	0.2	0.4	0.5
Euro area	103.3	103.2	103.2	103.2	103.3	0.0	0.0	0.0	0.0	0.1
Japan	102.1	102.4	102.6	103.0	103.4	0.2	0.2	0.3	0.4	0.4

Reports from Japan last week also showed that the economy may be accelerating again. Japan's index of coincident economic indicators rose to 102.1 in November from 100.7 in October while the index of leading economic indicators rose to 101.0 from 97.7. The economy watchers survey's current conditions index rose to 45.1 in December from 43.6 in November while the future conditions index rose to 43.9 from 41.4.

In the US, reports last week showed that retail sales and industrial production both rose in December. Retail sales rose 0.6 percent and industrial production rose 0.8 percent. US retail sales are now above the pre-recession peak in nominal terms.

The euro area reported a 1.2 percent rise in industrial production in November last week but probably more significant for the economy going forward were the sales of bonds by the governments of Portugal, Spain and Italy. Together, these three countries sold almost 10 billion euros of bonds last week, easing fears that demand for bonds from peripheral eurozone countries is drying up.