Business Cycle Update

Second Quarter 2024

Global business cycle in prolonged expansion

Many major economies, including the U.S., remained in the late-cycle expansion phase and registered hints of stabilization and even reacceleration in some areas. Expectations of monetary easing have contributed to improving global financial conditions, and worldwide manufacturing activity has firmed. China remained an outlier, as it continued to ease policy in hopes of reaccelerating from its growth slump.

  • Activity rebounds (GDP, IP, employment, incomes)
  • Credit begins to grow
  • Profits grow rapidly
  • Policy still stimulative
  • Inventories low; sales improve
  • Growth peaking
  • Credit growth strong
  • Profit growth peaks
  • Policy neutral
  • Inventories, sales grow, equilibrium reached
  • Growth moderating
  • Credit tightens
  • Earnings under pressure
  • Policy contradictory
  • Inventories grow; sales growth falls
  • Falling activity
  • Credit drives up
  • Profits decline
  • Policy eases
  • Inventories; sales fall
BCU InflationaryPressuresRed =HighRelativePerformanceofEconomicallySensitiveAssetsGreen =Strong+EconomicGrowth-RECOVERYCONTRACTIONEXPANSION India, Mexico, Brazil U.S. Japan Australia, Canada, Korea Eurozone, UK China

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