Reports last week showed that the global economy continued to slow as it entered the second quarter of the year.
Surveys of purchasing managers around the world showed that global growth slowed again in April. The JPMorgan global all-industry output index fell to 52.2 in April from 54.4 in March and after having hit a one-year high of 55.4 in February.
|JPMorgan Global All-Industry Indices|
The United States economy has been among the best performer of the major economies in recent months and April was no exception. The manufacturing sector accelerated last month, with the Institute for Supply Management’s manufacturing PMI rising to 54.8 from 53.4 in March. Services decelerated though, with the ISM's non-manufacturing index falling to a four-month low of 53.5 in April from 56.0 in March.
In contrast, the euro area continued to be the major drag on global output. Markit's composite index for the region dropped sharply to 46.7 in April from 49.1 in March. The manufacturing index declined to 45.9 from 47.7 while the services index fell to 46.9 from 49.2.
In Japan, growth also weakened in April but remained positive. The composite output index fell to 51.3 after having hit a series-record high of 53.2 in March. The manufacturing PMI fell to 50.7 from 51.1 while the services business activity index fell to 51.0 from 53.7.
April's purchasing managers' data, however, gave few signs of a slowdown in China's economy. The HSBC composite output index rose to 51.4 from 49.9 in March, with the manufacturing PMI rising to 49.3 from 48.3 and the services business activity index rising to 54.1 from 53.3. The China Federation of Logistics and Purchasing's manufacturing PMI also improved, rising to 53.3 in April from 53.1 in March. However, its services PMI fell to 56.1 from 58.0.
Employment data released last week also indicated that growth in the major economies is weakening.
In the US, nonfarm payrolls rose 115,000 in April, the smallest increase in six months. The unemployment rate fell nevertheless to a three-year low of 8.1 percent from 8.2 percent in March.
In contrast, the eurozone unemployment rate rose to 10.9 percent in March, the highest since April 1997, from 10.8 percent in February.