V-Shaped World Growth Won’t Translate to V-Shaped Output

(Bloomberg) -- Bloomberg Economics’ GDP tracker suggests global growth picked up further in July, hitting 5.4%, up from 4.4% in the previous month. Yet a ‘V’ shaped recovery in growth is not the same as a ‘V’ shaped recovery in output -- a rapid bounce back from an extremely low base still leaves the level of output considerably below the pre-crisis normal. Additionally, as BE’s daily activity indicators show, the recovery appears to be running out of steam. An unconstrained outbreak and stalled stimulus in the U.S., as well as continued caution putting a ceiling on activity elsewhere, mean the initial rapid rebound will be tough to sustain.

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