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From the DuPont Economist's Office


Recent Economic Trends and Implications

June 2013 (PDF)
Stuck in a Rut - Our forecast for global real GDP growth in 2013 has not changed significantly in nearly a year; every forecast since last August has been either 2.2% or 2.3%. (Our forecast is not done on a Purchasing Power Parity basis and is therefore not comparable to the higher forecasts done on such a basis.) Every positive development has been essentially balanced by a negative development of similar magnitude.

May 2013 (PDF)
Is there too much money, and what is it chasing?  Inflation has often been described as "too much money chasing too few goods." Monetarist economists have generally placed the emphasis on the subject ("too much money"), while supply siders emphasize the object ("too few goods") by pointing out that bad tax policies and other disincentives to work and investment can boost inflation by restricting the supply of goods and services. Economists of all stripes have tended to pay too little attention to the verb ("chasing").

April 2013 (PDF)
Concerns about growth in China: On April 15, China’s National Bureau of Statistics (NBS) reported that real GDP in China grew 7.7% from the first quarter of 2012 to the first quarter of 2013, slightly less than expected. Quarterly growth, seasonally adjusted, was just 1.6% (6.6% annualized), the second slowest quarterly growth rate in the nine-quarter history of the data series.

March 2013 (PDF)
US manufacturing picks up speed:  Industrial production is U.S. manufacturing rose 0.8% in February and has risen 3.5% (10.9% annual rate) over the last four months. This represents a sharp acceleration after production declined slightly from February to October last year.

February 2013 (PDF)
A number of surveys, and rising stock prices, point to improving sentiment about the global economy, but hard data, particularly GDP data, have yet to show a significant improvement in economic conditions.

January 2013 (PDF)
Silver Linings Amid the Grey Clouds: While recession risks always garner a disproportionate amount of attention, the real economic story of this young millennium, and especially since 2007, has been the downshift in long-term growth rates. As discussed last month, the trend growth rate of U.S. GDP is now less than 2.2%. Because of the combination of high government debt and slowing population growth, long-term growth rates have also slowed in Europe and Japan. As economic theory implies, growth has also slowed in developing economies as their standards of living have approached those in developed countries. (Hong Kong,Korea, Taiwan, and Singapore are the most obvious examples of this.)

December 2012 (PDF)
Although global GDP continues to rise slowly, growth in global industrial production has ground to a halt this year. Much of Europe remains in recession, Japan has fallen back into recession, and industrial production in U.S. manufacturing was lower in October than in February. Industrial production has turned up in South America after a big decline from mid-2011 to mid-2012. Growth appears to be reaccelerating in China after a more severe slowdown than official data indicate. Manufacturing in the rest of Asia has been essentially flat since early 2011, but recent data suggest that growth has also picked up in Indonesia and Taiwan.

September 2012 (PDF)
The Fed Giveth and the Fed Taketh Away: The Fed’s actions will give a little added boost to the housing and auto sectors, which have been relative bright spots in the U.S. economy this year, but the stimulus is tempered by the Fed’s counterproductive insistence on telling us how long rates will stay low. In the end, though, it isn’t monetary policy that is holding back the recovery, and there’s only so much that monetary policy can do to get the economy moving faster.

August 2012 (PDF)
Skirting a Global Recession ... or Not: Most countries in the world, most notably the United States and China, might narrowly avoid the pronounced, pervasive, and persistent decline in economic activity that defines a recession, but declines in industrial production in much of the world, compounded by the slowdown in nominal growth caused by the evaporation of pricing power, will make it feel like a recession for many manufacturers, even if GDP growth remains positive.

July 2012 (PDF)
Close to the Edge: When growth is this slow, it doesn’t take much to push it into negative territory. Shocks that an economy could easily withstand when growth is, say, 4% can tip an economy into recession when growth is only 1.5%. Our forecast is still for continued weak — but positive — growth in the United States for the rest of the year, but downside risks have grown since the release of the ISM report on July 2.

2Q2012 Economic Outlook 

Adapting to Change in the Architectural Paint Market
Adapting to Change
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