The big 5 average PMI has been trending sideways for 9 months now, but that apparent trend conceals the beginnings of an upturn a couple of months ago, which ended with the Trump tariffs shenanigans. The averages are weighted by GDP as measured by purchasing power parity (PPP) and each time series has been extreme-adjusted to remove outliers before being calculated. What is interesting is that the services and manufacturing big 5 PMIs are moving closer together, which on the whole has been the historical pattern. There is still too much smoke and dust to determine whether a new recession has begun. Certainly the tariffs are a zero-sum game at best, with output and spending being switched to the US, but at worst the jump in uncertainty would imply a net contraction, as spending and investment are postponed. We shall see.
The big 5 economies are: the USA, the Euro zone, the UK, Japan and India, and together they make up about 52% of world PPP GDP.
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