Business Cycle Update

Second Quarter 2021

Global Business Cycle in a Multi-Speed Recovery

The U.S. and most other major economies are progressing toward the mid cycle phase of expansion, with levels of activity based on vaccine rollouts and reopening progress. While China's expansion is maturing in its post-pandemic period, U.S. activity is poised to accelerate amid economic reopening and fiscal stimulus. Many other large economies, particularly developing countries, have slower vaccination and recovery trends.

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

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