Charting Global Economy: U.S. Recovery Picks Up, Europe’s Stalls

Robust home sales and improving activity at manufacturers and service providers indicate a firmer foundation for a still-at-risk U.S. economic recovery. In Europe, progress has stalled a bit this month, while China continues to struggle with tepid retail demand.

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

U.S.

Sales of previously owned homes surged by the most on record in July as lower mortgage rates continued to power a residential real estate market that’s proving a key source of strength for the economic recovery.

Business activity expanded in August at the strongest pace since early last year as faster growth at manufacturers spilled over to service providers, indicating the recovery is starting to broaden.

Europe

Europe’s economies will probably post impressive growth in the third quarter, but nowhere near enough to make up the shortfall of the first half of the year, according to Bloomberg surveys of economists.

The euro-area economy unexpectedly lost momentum this month as renewed travel restrictions and concerns about the coronavirus took a toll on services. Meanwhile, the U.K. continued its recovery from a record slump, though the good news was clouded by mounting job losses and a growing government debt burden.

Asia

Japan posted a record economic contraction in the second quarter, with recovery prospects now hinging on how quickly an uptick in virus infections can be contained.

Chinese retail consumption unexpectedly fell in July, but the result would have been even worse without a strong rebound in car sales, which rose the fastest in more than a year. Unless the automobile recovery appears in other consumer sectors, China’s domestic economy will struggle to generate a sustained recovery.

Emerging Markets

India’s rural economy swung to growth in June after eight months of contraction, according to Bloomberg Economics’ tracker. The year-on-year expansion partly reflected a low base so it’s hard to say the recession is over, but the emerging strength in what amounts about 45% of gross domestic product still bodes well for the broader economic recovery.

Scoring 75 economies, Bloomberg Economics finds Asia is leading the rest in getting back to pre-crisis norms, while Latin America is struggling to contain the pandemic.

— With assistance by Ziad Daoud, Abhishek Gupta, Scott Johnson, Sharon Chen, Ainhoa Goyeneche, William Horobin, Harumi Ichikura, Yoshiaki Nohara, Fergal O’Brien, Yuko Takeo, Yinan Zhao, and David Goodman

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