(Bloomberg) -- Remember that "synchronized global upswing"? At the very least, it's gotten out of sync.
For much of the past year, "global upswing" was a compelling way to describe the economic picture. A new understanding is needed, but we won't be sure just what is happening until we see whether Japan and the euro region can convincingly bounce back from a string of disappointing numbers. If they can't rally as most economists predict, more of the burden for the global expansion will fall to the U.S. and China.
Their fate also has consequences for the great secondary narrative of the past year: the tapering of monetary stimulus across jurisdictions, certainly in the U.S. and Europe and, just possibly, a trace of something on the distant horizon in Japan.
The Federal Reserve is plowing ahead, buoyed by 3.9 percent unemployment and inflation finally at its 2 percent target. The European Central Bank's willingness to ease off its stimulus by buying fewer bonds might be called into question if the economic reports there don't perk up a bit. Any whiff of a tweak to Japan's stimulus has dissipated.
Not that Japan is in crisis. Gross domestic product shrank at an annualized rate of 0.6 percent in the first quarter — but a shallow contraction in GDP was widely anticipated. Private consumption was flat, and capital spending dipped. Still, the jobless rate remains extremely low and production is tipped to pick up this quarter.
I have been relatively upbeat on Japan over the short term and still am, but the situation does bear watching. A shrinking population is the biggest single challenge but doesn't explain this short-term stumble; the demographic issue began long before the recent two years of uninterrupted expansion and will be with the country indefinitely.
The cooling growth across Europe also doesn't call for panic just yet. The most consequential tailing off has been in Germany, where the economy expanded 0.3 percent in the first quarter — half the clip of the preceding three months. Observers attribute that to fleeting causes like poor weather. Critically, European Central Bank officials are mostly dismissing this as a blip.
It may well be. But in combination with Japan's slip, it starts to feel as though something is going on, like the world economy has shifted down a gear. Far from a recession, but not as ebullient in the outlook as in 2017.
Emerging markets are off the boil after a stellar run last year, though their fate hangs largely on the biggest economies, the dollar and the outlook for monetary policy in the developed world. They are also dependent on China, which is hanging in there with growth shy of 7 percent. A bust in China — it's been predicted for years without materializing — would be painful for everyone. I wrote late last year that emerging markets, for all the hype about decoupling and the decline of the West, aren't masters of their own destiny. That's still true.
So. If we're no longer in a "synchronized global upswing," what's the revised term? Nothing too dramatic; it's not like economies are tanking. Denise Simon, co-head of the emerging market debt team as Lazard Asset Management, this week referred to asynchronous global growth. She's onto something.
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