Big 8 PMI average ticks up a little

 As usual, the services and manufacturing PMIs are PPP-GDP-weighted averages of extreme-adjusted country PMIs.  The average of the two (the green line) then gives us the "Big 8" total PMI.  The Big 8 economies are the USA, the Euro Zone, the UK, India, China, Russia, Brazil, and Japan.   They make up roughly 70% of the world economy.

As you can see, the "revenge spending" on services after covid lockdowns ended is fizzling, while the manufacturing sector may be bottoming.   Of these economies, the Euro Zone and the UK remain by far the weakest, while the US seems to be rebounding, despite the swingeing rise in the Fed Funds rate, because of the fiscal sugar hit caused by the so-called Inflation Reduction Act.  The varying response of Europe and the US to the combination of fiscal stimulus and monetary stringency demonstrates the effectiveness of big deficit spending:  big stimulus in the US stops the downturn, no stimulus in Europe lets the European economy slide deep into recession. 

I'm sorry I didn't comment on this earlier in the month.  I've been dealing with some personal issues.

Euro zone as weak as during the euro crisis in 2012

The economies of "small 8" (Switzerland, Sweden, SA, NZ, Israel, Canada, Belgium, Australia, making up ~6% of the world economy) are driven by what happens to the Big 8.   Whatever politicians in smaller economies promise, it's hard to evade the consequences of the global business cycle.

Why these countries?  They were the countries I could construct 20 years plus of data for.  I wanted to see the relationship over several business cycles.  I have recently found data for Denmark and Norway back to the late 1990s, so I will be adding them to the small 8, making it the small 10.  More of that in a later post.