World economic index hits 19-month high, boosted by U.S. and Japan

The economic outlook for the world’s major economies improved in January, bolstered by signs of firmer recoveries in the United States and Japan, the Organization for Economic Development and Cooperation reports this morning. The international group’s composite index of leading indicators rose to 100.4 in January, up slightly from the previous month and the highest level since June 2011. As the Los Angeles Times reports, the group’s index is another sign that the U.S. economic recovery is strengthening, following Friday’s report that the February unemployment rate dropped to a four-year low of 7.7% after the nation added 236,000 new jobs. The monthly index projects economic growth trends over the next six to nine months using a variety of data, including orders, inventories, business confidence and financial market indicators. The index has been on the upswing since the fall. The latest data show “diverging growth patterns” in the world’s leading economies, the OEDC says. Indicators showed growth firming in the United States and Japan, while growth was starting to pick up in the euro zone, particularly Germany. The index also points toward slowing growth in the United Kingdom and weaker growth in Canada. China, India and Brazil all were headed toward growth below the long-term trend, the OEDC says.