- The IMF now predicts the global economy to grow 6% in 2021 and 4.4% in 2022
- US Consumer Credit rises at an annual rate of 7.9% in February
- The ISM Manufacturing index registered 64.7 in March while the ISM Services Index recorded 63.7
Top Three Market Headlines
IMF Upgrades Global Economic Outlook: Last week the International Monetary Fund (IMF) increased its estimate for global growth to 6% in 2021 and 4.4% in 2022. This represents an upgrade of 0.5% and 0.2% respectively from January and marks the fastest projected growth since 1980. Several factors have bolstered the IMF’s global outlook, including unprecedented global fiscal spending, central banks’ commitment to zero interest rate policy, and a swift rollout of vaccines in developed nations like the United States. The IMF predicts an uneven recovery with developed countries growing at a much faster rate than emerging markets.
US Consumer Credit Accelerates in February: Consumer credit beat expectations in February, rising $27.6 billion from the previous month, the largest gain month over month since February 2017. Revolving credit increased at an annual rate of 10.1% to $8.1 billion, the largest monthly climb since December 2019. Non-revolving credit, which includes auto and school loans, increased at an annual rate of 7.3% to $19.5 billion. Federal government holdings of student loans comprise the largest portion of non-revolving credit, making up 46% of outstanding credit. The surge in borrowing indicates increased consumer confidence as the economy continues its rebound from pandemic-related lows.
US Manufacturing and Services Sectors Surge in March: The U.S. economy continued to recover in March, according to surveys of business executives released by the Institute for Supply Management (ISM). The ISM Manufacturing index registered 64.7 in March, up from 60.8 the prior month. This was the highest reading since 1983. The services sector experienced similar growth in March as the ISM Services index rose to 63.7, the highest reading since data collection for the index began in 1997.