Global spending and investment appear very cautious, and seem likely to remain so for some time, given the overhang of debt from before the crisis. In advanced economies, deleveraging in the private sector appears to have started, but will take a long time – perhaps a generation. Very cautious households are a large part of the story of a slow and fragile recovery.
They have been hit hard by sustained labour market weakness, and in the US and some other advanced economies this has been compounded by loss of housing wealth and balance sheet weakness. The apparently lower appetite for debt among New Zealand and Australian households is an interesting departure from the recent past, or perhaps a return to the more restrained standards of post-war years.