Charting the Global Economy: Growth Surges in U.S., Euro Area

(Bloomberg) -- The U.S. and euro-area economies just posted their strongest growth rates on record in the third quarter, though activity is set to moderate for the remainder of the year, and possibly contract in Europe.

The improvement in total U.S. output exceeded the gains in gross domestic product in Europe’s biggest economies, which are now implementing tighter restrictions after another surge in coronavirus cases.

Here are some of the charts that appeared on Bloomberg this week, offering insight into the latest developments in the global economy:

U.S.

The world’s largest economy in the third quarter posted its fastest quarterly growth on record, though it comes after the worst downturn ever as a result of the coronavirus-related shutdowns. Personal spending fueled the surge, climbing an annualized 40.7%, also a record, while business investment and housing also registered strong increases. While a more moderate pace of economic growth will unfold in the current quarter, consumer spending, housing and manufacturing remain robust.

Manufacturers may be just warming up. More factories are reporting orders expansion at the start of the fourth quarter, based on the latest regional data from several Federal Reserve banks. Still-lean inventory levels and steady consumer and business demand help explain the acceleration in the orders indexes.

Europe

The euro-area economy surged by a record in the third quarter in a rebound that’s now being derailed by an intensifying coronavirus pandemic and new government restrictions. Gross domestic product for the single-currency bloc jumped almost 13%, with France, Italy and Spain also posting gains of more than 10%. More up-to-date indicators paint a gloomier picture, and the bloc’s economy is now at risk of slipping back into recession.

European Union governments face mounting pressure to adopt punitive measures against Turkey after President Recep Tayyip Erdogan called for a boycott on French goods. Greece has asked for an arms embargo in response to Turkey’s maritime claims in the Eastern Mediterranean and Ankara’s stance in the Cyprus dispute. Such a move would hurt Germany the most, arms export data released this week by the European Commission show.

Asia

China’s economic recovery displayed mixed signals while remaining broadly steady in October, with small businesses turning more cautious and the property market weakening even as car sales soar.

China said it needs to build its own core technology because it can’t rely on buying it from elsewhere, as the Communist Party laid out plans for greater economic self-sufficiency.

Emerging Markets

Economic activity in emerging markets excluding China in the fourth week of October was 18% below the pre-virus level, according to Bloomberg Economics gauges that integrate high-frequency data such as credit-card use, travel and location information. That’s slightly higher than in advanced economies.

South Africa will spend more on servicing government debt than on health services from the next fiscal year. That’s even as it battles the coronavirus and as the majority of the population of 60 million people relies on a public health system with too few doctors and dilapidated facilities.

India’s economy picked up speed in September as a revival in demand and business activity helped drive the South Asian nation toward recovery from the pandemic-induced slump.

World

The amount of money that migrants send home this year will drop less than previously forecast, while continuing to fall in 2021 as the Covid-19 pandemic leads to a more gradual and prolonged decline, the World Bank said.

The world is headed toward a massive debt burden because of the pandemic, but finding and distributing a vaccine would allay risks, according to a report by S&P Global Ratings.

©2020 Bloomberg L.P.