Global economy shows acceleration in November

Recent economic data indicate that the global economy improved in November.

Surveys of purchasing managers around the world showed an acceleration in global economic activity in November. The JPMorgan global all-industry output index rose to 53.7 last month from 51.0 in October.

JPMorgan Global All-Industry Indices
	October	November
Output	51.0	53.7
New orders	50.9	52.2
Input prices	57.6	54.9
Employment	50.8	50.0

Improvement in the purchasing managers' data from the United States helped drive the improvement in the global reading. Markit's US manufacturing PMI rose to 52.8 in November from 51.0 in October while the Institute for Supply Management's non-manufacturing index rose to 54.7 from 54.2.

However, clouding the picture for the US somewhat was another report from the ISM showing a fall in its manufacturing PMI to 49.5 in November, the lowest since July 2009, from 51.7 in October.

In the euro area, the contraction in the economy slowed in November. Markit's composite output index rose to 46.5 in November from 45.7 in October. The manufacturing PMI rose to 46.2 in November from 45.4 in October while the services business activity index rose to 46.7 from 46.0.

In China, the manufacturing PMI from the China Federation of Logistics and Purchasing and the National Bureau of Statistics rose to 50.6 in November from 50.2 in October while HSBC's China manufacturing PMI rose to 50.5 from 49.5.

However, there was some contradiction in the services sector data, where the official PMI rose to 55.6 in November from 55.5 in October but HSBC's services PMI fell to 52.1 from 53.5.

Despite the decline in the services PMI, the HSBC China composite output index rose to 51.6 in November from 50.5 in October.

Markit's composite output index for Japan also rose in November to 49.9 from 48.9 in October. The manufacturing PMI fell to 46.5 in November from 46.9 in October but the services business activity index rose to 51.4 in November from 50.0 in October.

Beyond the purchasing managers' surveys, there were other important economic reports last week.

In the US, a report on Friday showed that employment continued to increase at a relatively healthy pace in November. Nonfarm payrolls rose 146,000 last month and helped bring the unemployment rate down to 7.7 percent from 7.9 percent in October.

Also on Friday, a report from Japan showed that its index of coincident economic indicators fell 0.9 point in October. In its assessment of the economy, the Japanese government said the index was “worsening”. Indeed, the index has now fallen for seven consecutive months.

However, the index of leading economic indicators did provide an encouraging sign, rising by 0.9 point in October.

Finally, on Sunday, China reported that industrial production rose 10.1 percent in November from a year earlier, the fastest pace in four months. Retail sales and fixed-asset investment also accelerated in November while inflation rose to 2.0 percent from 1.7 in October.