Resiliency is not enough  The global expansion has displayed impressive resiliency in the face of significant drags related to surging inflation and China lockdowns. The latest EM  GDP reports for 1Q22 are encouraging, with a surge in DM imports boosting  activity significantly (Figure 1). Although net trade drags combined with a  squeeze on household purchasing power to hold back DM growth last quarter,  supports from business spending and hiring along with declining household  saving rates have provided an important cushion. This message was underscored in this week’s data showing European labor market strength through  last quarter alongside upbeat US April retail sales and factory output reports. 

Our US nowcast revision index (NRI) has taken a notable step higher over the  past month and the nowcaster is tracking 4.2%ar 2Q22 GDP growth—a full  percentage point above our forecast