Economy Watch: IMF Says Global Recession Risk Small

By Dees Stribling, Contributing Editor

The International Monetary Fund said on Tuesday that the risk of another global recession isn’t as high now as it has been in recent years, attributing the declining risk to stronger-than-expected recoveries in the developed world, such as the United States, Germany and the U.K. Currently the organization predicts global growth of 3.6 percent in 2014, followed by 3.9 percent in 2015.

The IMF has revised its growth forecast upward for Great Britain more than any other developed economy, predicting it will come in at 2.9 percent in 2014, though it warns that too many Britons are borrowing too much. The organization also noted that “the government’s efforts to raise capital spending while staying within the medium-term fiscal envelope should help bolster recovery and long-term growth.” As for the American economy, the IMF says it will grow 2.8 percent this year.

“The recovery which was starting to take hold in October is becoming not only stronger, but also broader,” IMF chief economist Olivier Blanchard notes. “Although we are far short of a full recovery, the normalization of monetary policy—both conventional and unconventional—is now on the agenda.”

Job opens up in February

The Bureau of Labor Statistics reported on Tuesday in its Job Openings and Labor Turnover Summary that there were 4.2 million job openings on the last business day of February, up from 3.9 million on the last day of January. The number of job openings increased in retail trade and in professional and business services, while the number decreased in arts, entertainment and recreation.

The BLS also said that the quits rate was essentially unchanged for February compared with January, coming in at 1.7 percent for both months. That percentage was the same for total nonfarm jobs, and for total private jobs and total government jobs.

Quits are generally voluntary separations initiated by the employee. As such, the quits rate is an indirect measure of the strength of the employment market, since it gauges workers’ willingness or ability to leave jobs. The number of quits was also little changed over the 12 months ending in February for total nonfarm, total private, and government jobs.

Small business owners more optimistic

According to the National Federation of Independent Businesses on Tuesday, its Small Business Optimism Index rose 2 points in March to 93.4, mostly reversing the February decline. NFIB owners increased employment by an average of 0.18 workers per firm in March, an improvement over February’s 0.11 reading and the sixth positive month in a row.

Wall Street managed to realize some gains on Tuesday, with the Dow Jones Industrial Average up 10.27 points, or 0.06 percent. The S&P 500 advanced 0.38 percent and the Nasdaq climbed 0.81 percent.