It is continuing to grow, but momentum has clearly slowed. While recent data have been a bit better than over the previous couple of months, risks still look tilted to the downside. Consumer confidence remains low, the housing and labour markets remain weak, and the repair of household balance sheets still has quite a way to run.
One bright spot in the United States is that business balance sheets are in good shape and equipment investment is recovering. In Europe, there is a large disparity in growth across countries. Germany remains the clear front-runner, benefiting from earlier economic reforms and Chinese demand for German capital goods. German unemployment has fallen to its lowest rate since the early 1990s.