One of the most accurate and reliable global economic indicators is the CRB raw industrials spot price index. It has been falling this year, and is now the lowest since Nov. 9, 2009. However, other global economic indicators show that there is growth, and no reason to conclude that a recession is looming. The latest upbeat indicator is June’s 2% increase in Germany’s new factory orders, led by foreign orders, to the best reading since April 2008.
The J.P. Morgan Global Composite Purchasing Managers index edged up to 53.4 during July from 53.1 in June. Its manufacturing component remained unchanged at 51, while the non-manufacturing PMI led the rise in the overall index. On the other hand, the HSBC Emerging Markets Composite PMI remained weak during July at 50.2, though that was an increase from 49.6 the month before.
China’s July trade figures remained on the soft side. On a seasonally adjusted basis, imports fell 2.1% month-over-month and 8.1% year-over-year. Some of that weakness reflected the drop in oil prices. However, imports excluding petroleum still fell 3.4% year-over-year during June, suggesting weak domestic demand. Exports declined 4.9% month-over-month last month and 8.3% year-over-year, suggesting weak global demand. Exports have been essentially flat now since early 2013.
In the U.S., the labor market continues to improve. The Citigroup Economic Surprise index has rebounded to -7.6% at the end of last week from the year’s low of -73.3% on March 23.