 Data show softer growth amid success in limiting COVID-19 drag  Decline in cases and vaccine pickup raise hope for spring bounce  US, Europe 1Q slowdown set to dampen Asia export boom  Next week: Jan CPI: up in US, down in China; Banxico eases Punxsutawney Phil sees six more weeks of winter High-frequency data point to a loss of momentum at the start of the year, led by a notable January drop in our Google Activity Index (GAI), which has yet to recover from its year-end tumble. The more official activity data for January now rolling in underscore this message. Our global all-industry output PMI fell to its lowest level since July and the US labor market remained soft.

Even smoothing through the noise, US jobs are down 89,000 and hours worked have increased just 0.1% per month over December and January on average. We continue to expect global GDP growth to slow to a belowpotential 1.2% ar pace this quarter.

While abrupt downshifts in growth typically raise concerns, recent developments bolster our confidence that 2021 will deliver boomy global growth following a near-term soft patch. Despite the slowdown, the global economy is displaying impressive resilience to the pandemic. European economies, hit hard last quarter by the virus, delivered significant upside surprises in this week’s 4Q20 GDP reports. This was reinforced by a relatively solid set of January business surveys. Targeted government restrictions look to have limited the spillover to broader activity. More broadly, business confidence has remained solid with a willingness to look through this period of slower demand.

Global capex and stock-building remain a source of robust growth (link). The January all-industry PMI future output index rose and is hovering near its highest level in over six years (Figure 1).