Global Data Watch A tale of the tails-110516252

Global Economic Research27 September 2024J P M O R G A Nwww.jpmorganmarkets.comContentsBoth sides now: Widening global growth tails13Global house price gains on the rise again16Euro area PMI slide raises Angst20Japan: Rerating reflation23South Africa: Gauging fiscal progress26 Global Economic Outlook Summary4Global Central Bank Watch6Economic Activity Tracking8Selected recent research from J.P. Morgan Economics10J.P. Morgan Market Watch11 Data Watches United States28 Focus: The growth drag from upcoming41port closuresEuro area42Japan48Canada51Mexico53Brazil55Argentina57Andeans59United Kingdom61Emerging Europe64Australia and New Zealand68China, Hong Kong, and Taiwan70Korea74ASEAN76India79 Regional Data Calendars81Economic and Policy ResearchBruce Kasman(1-212) 834-5515bruce.c.kasman@jpmorgan.comJPMorgan Chase Bank NAJoseph Lupton(1-212) 834-5735joseph.p.lupton@jpmorgan.comJPMorgan Chase Bank NANora Szentivanyi(44-20) 7134-7544nora.szentivanyi@jpmorgan.comJ.P. Morgan Securities plcManaging EditorMalcolm Barr(44-20) 7134-8326malcolm.barr@jpmorgan.comJ.P. Morgan Securities plcGlobal Data Watch•Divergent momentum signals point to wider growth tail-risks ...•… and to more policy easing from China and the ECB •Falling oil prices and easing financial conditions tilt bias toward upside risk•But we look for a drop in September PMI and soft US job gains next week A tale of the tailsAn unusually wide divergence in growth momentum indicators has emerged this quarter. These tensions may very well prove consistent with our narrative that the global expansion downshifts to a below-trend pace in the coming two quarters. However, these developments also widen the tail-risks around this baseline. We do not anticipate a break, but concerns about softening DM labor demand and sliding global manufacturing surveys keep near-term recession risk elevated. Next week’s key September releases—global manufacturing PMI and US employment—are not expected to calm these concerns. There are however plenty of reasons for sustained resilience, and a less appreciated risk is that this quarter’s positive final demand momentum and accelerated policy easing interact with supportive financial conditions to produce materially above-potential growth. This risk is amplified by this week’s news of efforts in China to offset housing market weakness and our revised expectations for a faster pace of ECB policy easing with a next cut in October. We see a number of forces underlying these tensions: • Firming consumers boosts 3Q24 growth. Our current-quarter global (ex-China) GDP forecast has moved materially higher in recent weeks (Figure 1), largely on the back of signs of a broad lift in global consumer spending. While the picture on business spending remains less clear, evidence of strong US capex and Asia export growth reinforces the message that global final demand is rising at an above-potential pace. • Manufacturing surveys tank. Despite positive news on final demand, manufacturin