Another week, another load of economic data – and it’s good, really good
As the US President, un-characteristic of him, who is normally shy about pointing to his successes, prepares to wow the Davos glitterati with his boasts about the US economy, the latest data is unequivocal – it is not just the US economy that is in good shape, the global economy is in its best shape for years.
Let’s start locally – UK employment surged by 102,000 in the three months to November, up 1.3 per cent on the year before, and is now at an all-time high. Wages rose by 2.5 per cent in the three months to November, compared to the year before. That is still less than inflation, but this is expected to fall this year, it should only be a matter of time before real wages start rising again.
Sterling is surging on the news, especially against the dollar.
But look a little to the east and the news gets better. The latest flash purchasing managers index tracking the euro area rose again, this time to a 139 month high. The jump was led by the services sector too, this is good news as the purchasing managers index tracking euro area manufacturing hit an all-time high last month. The rise in services shows the recovery is nicely balanced.
The index was consistent with quarterly growth of 0.7 per cent in Germany and 0.8 per cent in France.
If the political instability and the rise of populism has its roots in anaemic economic performance since 2008, then the economic stats suggest this is being alleviated.
Another flash purchasing managers index tracking Japan rose to a four-year high.
And another survey tracking the US is looking up too.
Yes the US economy is looking strong, but the euro area seems to be in its best shape this century.