Putnam Global GDP Nowcast | January 2024

The Putnam Global GDP Nowcast index is a proprietary GDP-weighted quantitative model that tracks key growth factors across 25 economies. This index and individual country indexes are used as key signals in Putnam's interest-rate and foreign-exchange strategies.

Strong labor market reduces recession risk


The U.S. labor market remained strong in December as layoffs stayed at a low level. Total nonfarm payrolls rose by 216,000 in December, an increase over the November job gains that were revised down to 173,000. Overall wage inflation continued to ease. While the data was better than the market expected, it continued to fit with the Federal Reserve's assessment that the labor market is coming into balance. At the same time, it might give the Fed a reason to move back the start of interest-rate cuts later this year.

ISM Manufacturing stayed in contraction in December but continued to indicate gradual bottoming in the manufacturing cycle. All manufacturing industries were weaker at the end of the year, but the survey respondents were optimistic about 2024.

Euro area headline inflation increased to 2.9% in December from 2.4% in November, while the core inflation rate eased to 3.4% from 3.6% in the prior month. Energy inflation remained negative but increased due to base effects. Food inflation eased to 6.1% and is likely to continue to decline. Core goods inflation slowed to 2.5% and, as with food prices, is likely to decline further. Services inflation was unchanged at 4%.


This six-year illustration shows stable GDP up until the collapse from the coronavirus pandemic.

Feb '20–April '20

The Covid-19 pandemic causes a global economic downturn.

May '20–Dec '21

Global growth starts to surge and stays at elevated levels as life continues to normalize.

Jan '22–present

Central bank tightening, inflation, and Russia-Ukraine War increase volatility and uncertainty.

Source: Putnam. Data as of December 31, 2023. We base our Global GDP Nowcast on a tailored methodology that captures daily data releases for the most essential growth characteristics for each of 25 countries — including purchasing managers' index data, industrial production, retail sales data, labor market metrics, real estate price indexes, sentiment indicators, and numerous other factors. The mix of factors used for each market may change over time as new indicators become available from data sources or if certain factors become more, or less, predictive of economic growth.

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