Business woman Thomas Barwick/Getty Images

The Global Economy’s Surprising Resilience

Disconcerting political developments in the US and the UK might lead one to conclude that an already challenged world economy will struggle even more in the near term. But the cyclical evidence – based on six key indicators – actually suggests otherwise.

LONDON – Disconcerting political developments in the United States and the United Kingdom might lead one to conclude that an already challenged world economy will struggle even more in the near term. But as we continue into 2017, the cyclical evidence actually suggests otherwise.

Since my days as Chief Economist at Goldman Sachs, I have kept an eye on six indicators from around the world that, taken together, provide a reliable snapshot of what the global economy will look like for the next six months. Right now, all six indicators show more promise than they have for some time, and only one of them has fallen slightly from a recent high.

The first indicator is weekly unemployment claims in the US, from which one can gauge the overall strength of the US economy. Economists are rightly trained to treat unemployment as a lagging indicator, but these data can also be useful in forecasting the near future. US jobless claims are always up to date, because they are produced weekly, and statistical evidence suggests that they are a leading indicator for US equity prices. As of last week, jobless claims remained rather low, as they have for some time, which bodes well for US stock markets.

To continue reading, please log in or enter your email address.

To read this article from our archive, please log in or register now. After entering your email, you'll have access to two free articles from our archive every month. For unlimited access to Project Syndicate, subscribe now.

required

By proceeding, you agree to our Terms of Service and Privacy Policy, which describes the personal data we collect and how we use it.

Log in

http://prosyn.org/ZqXqusE;

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.