Despite uncertainty, confidence surveys are reporting levels in line with global growth of about 4%. The figure is higher than the last-twenty-year average and close to the 2013 highs (see Figure 1).
The slowdown in the Eurozone’s first-half 2018 growth no doubt reflects a return to normal expansion levels after several quarters of above-potential growth, as well as some extraordinary factors such as strikes and extreme weather.
PMI surveys have stabilised at a level in line with 2% growth (see Figure 2) and the labour market continues to improve. Unemployment is falling steadily and certain data indicate an acceleration in wages. Nonetheless, core inflation remains steady at around 1.0%.
In the US, second-quarter 2018 growth increased at its strongest pace since 2013 (+4.2% annualised) and survey data remain in line with this high-growth scenario (see Figure 3). Furthermore, the peak impact of fiscal policy is still to come and likely to be reached in Q4 2018.
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