Global economy: October, a month marked by geopolitical tension
In the United States, economic policy uncertainty, based on media coverage, increased in October for the second month in a row. The rise is probably related to the ongoing risk of a US government shutdown, and also to some uncertainty around the tone of the Fed’s statement after the FOMC meeting of 31 October-1 November.
The geopolitical risk index, also based on media coverage, has resumed declining according to the latest available points, following a sharp rise in the first three weeks of October linked to recent tensions in the Middle East.
The stock market based uncertainty index continues to fall in the Eurozone and is now below its pre-pandemic level. This index also continues to weaken in the USA after a period of stability.
After a slight increase in uncertainty in September, US companies expressed slightly more confidence in their sales revenue growth in October. The improvement is probably linked to the strong GDP growth print in Q3 2023.
In contrast, regarding employment prospects, uncertainty increased again in October, in relation to the clearer signs of a slowdown in the US labour market.
In the Eurozone, the European Commission’s economic uncertainty index picked up again in October, buoyed by the construction sector, services and, above all, households’ uncertainty. In the industry and retail trade sectors, uncertainty remained broadly stable.
Author
BNP Paribas Team
BNP Paribas
BNP Paribas Economic Research Department is a worldwide function, part of Corporate and Investment Banking, at the service of both the Bank and its customers.
