Business Cycle Update

Third Quarter 2021

Global Expansion Progressing in an Uneven Manner

The U.S. shifted fully into the mid-cycle phase, as a broadening expansion accompanied the economy's reopening. Major economies are on differing trajectories, with a number of developing countries inhibited in particular by their more-limited vaccination and reopening progress. The global cycle's momentum is widening, with staggered re-openings likely leading to ongoing improvement, even if in fits and starts.

  • 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 China U.S. Eurozone, UK, Australia, Canada Japan, Korea Brazil, India, Mexico

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