Traffic lights turning green
By Stella Dawson
(Reuters) - Counting container ships plying the high seas and air cargo takeoffs is one way to track the outlook for the global economy. Both measures point to weak growth in the months ahead but no severe storms.
Solid employment gains in the United States that pushed the jobless rate down to its lowest level in almost three years and a stabilizing of business activity in December even suggest global growth could firm at the start of 2012 -- a welcome contrast to the gloomy predictions at the close of last year.
Europe continues to present the biggest risk. Recovery could be undermined if Italy's debt woes worsen or political discord among European Union leaders threatens the viability of monetary union. A clutch of EU meetings this week will put the euro zone back in the spotlight.
Rising oil prices on Iran nuclear tensions also cast a shadow.
But right now, the economic data is providing some reassurance that a gradual strengthening in the United States will underpin slow but steady growth globally.
"I guess we have a hunch that things will start to go a little bit better than expected, or at least not dramatically down," said Tal Shapsa, global economist for Barclays Capital, which expects industrial output to stabilize in the months ahead.
A global factory index compiled by JPMorgan ticked upward unexpectedly in December to 53 from 52 the prior month, led by a better U.S. performance and a slowing in the pace of contraction in China and Europe. A services sector index also strengthened.
Shipping measures, a forward indicator of trade flows, likewise have steadied. The Baltic Dry Goods Index .BADI, which tumbled in November, has leveled out though it remains stuck at crisis-era lows. It provides an early window into global demand by measuring shipping costs for iron ore, cement, grain and other raw commodities. Continued...