“While the outlook has improved overall, prospects are diverging dangerously not only within nations but also across countries and regions. In fact, what we see is a multi-speed recovery, increasingly powered by two engines — the US and China,” Kristalina Georgieva, the managing director of the International Monetary Fund, said in remarks last week.
Her comments set the tone for a week of virtual meetings at the IMF and the World Bank, where the pace of the Covid-19 recovery will take center stage. Finance ministers from top economies are also set to convene this week at a meeting hosted by Italy.
Georgieva hailed “good news” for the global economy thanks to vaccinations and additional stimulus spending in the United States. She indicated that the IMF will upgrade its global economic forecast on Tuesday. The group last predicted that global growth would hit 5.5% in 2021.
“An American economy about to regain its swagger after a year of pandemic-induced crisis was on full display in the March jobs report,” Joseph Brusuelas, chief economist at RSM US, said in a note to clients.
The job market is still in a hole, with the country down 8.4 million positions since February 2020.
But industries that have been hit hard are showing signs of resilience. Restaurants and bars added 176,000 jobs last month, while state and local education jobs rose by 126,000 as schools started to reopen. Delivery services such as FedEx and UPS, which have benefited from the huge increase in online shopping, added another 17,000 jobs.
The US manufacturing sector is also roaring ahead, with the ISM Manufacturing Index recently posting its best reading since 1983. Consumer confidence is the strongest it’s been in a year. Data on the US services sector is due Monday.
Elsewhere, though, slow vaccination campaigns and a resurgence of cases could pose problems.
“There is danger as well,” Georgieva said last week. “Vaccines are not yet available to everyone and everywhere. Too many people continue to face job losses and rising poverty. Too many countries are falling behind.”
Her comments were echoed over the weekend by Ignazio Visco, the governor of Italy’s central bank.
LG was a smartphone pioneer. Now it’s quitting the business
LG is getting out of the “incredibly competitive” business of making smartphones.
The division is expected to be wound down by July 31, although the company may continue to sell some of its existing models after that, according to LG Electronics.
The “strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions,” it said in a statement.
LG was once one of the world’s top smartphone makers, earnings a spot among the top three global players in 2013, according to research firm Strategy Analytics.
“LG leaves a ‘small vacuum’ of global market share of under 2%,” Neil Shah, a partner and vice president of research at Counterpoint Research, told CNN Business.
That space will likely be filled by Samsung in both South Korea and the United States, as well as some smaller players, he predicted.
It’s a sad day for this former owner of a baby blue LG Chocolate. But the signs have been there. LG warned in January that it was looking at all options, including a potential sale of the unit.
Why US housing could be more expensive forever
Investors hunting for yield are increasingly pumping money into single-family homes or even entire neighborhoods, a trend that could permanently increase the cost of housing in the United States.
“You now have permanent capital competing with a young couple trying to buy a house,” said John Burns, whose real estate consulting firm estimates that in many top markets, about one in every five houses sold is bought by someone who never moves in.
His firm thinks the bubble could grow bigger before it pops, predicting that home prices will rise 12% this year and 6% or more in 2022.
Experts say there are meaningful differences between this real estate boom and the one that helped trigger the 2008 financial crisis, with tighter lending standards and more limited stock. But as the bull market marches on, the frenzy is worth monitoring.
The ISM Non-Manufacturing Index, a closely-watched gauge of the US services sector, posts at 10 a.m. ET.
Coming tomorrow: Stay tuned for the International Monetary Fund’s latest outlook for the global economy.