Reports last week suggest that the global economy continued to weaken in the third quarter.
In the United States, the latest estimate of second quarter gross domestic product released last week showed that the economy grew 1.3 percent, less than the previous estimate of 1.7 percent.
There has probably been no improvement in the third quarter. A report from the Chicago Federal Reserve at the beginning of last week showed that its national activity index fell to -0.87 in August from -0.12 in July.
The three-month moving average of the index fell to -0.47 in August from -0.26 in July. That is its lowest reading since June 2011. It is also the same as when the economy last entered recession in December 2007.
Recent economic weakness in the US has been driven by manufacturing and data last week suggest that this will continue. Durable goods orders plunged 13.2 percent in August. This was mainly due to a 34.9 percent fall in transportation orders. However, even excluding transportation, orders fell 1.6 percent.
However, consumer spending may help to keep the economy growing in the third quarter. Although real personal consumption expenditures rose just 0.1 percent in August, consumer sentiment improved in September. The Conference Board’s consumer confidence index rose to 70.3 in September, the highest level in seven months, from 61.3 in August, while the Thomson Reuters/University of Michigan consumer sentiment index rose to 78.3 last month from 74.3 in August.
If US economic data last week looked weak, it was no better elsewhere.
In the euro area, the European Commission's economic sentiment indicator fell to 85.0 in September from 86.1 in August. It was the seventh consecutive fall in the indicator and brings it down to the lowest level in three years.
Data last week painted a similar picture for the Japanese economy. Industrial production there fell 1.3 percent to a 15-month low in August, with a survey by the Ministry of Economy, Trade and Industry showing that output was expected to fall again by 2.9 percent in September before stabilising in October.
Finally, in China, HSBC's manufacturing purchasing managers index rose to 47.9 in September from 47.6 in August. While an improvement, it was the 11th consecutive month that the index has stayed below 50, indicating contraction in the manufacturing sector.