Don’t get too excited about the cycle’s twists and turns

The financial crisis triggered a synchronised shock that temporarily interrupted most economic activities. However, at some point households and businesses will start making some of the decisions presumably postponed because of heightened uncertainty, thus generating a short-term bounce in economic activity. This suggests that the data, while still bad, may surprise on the upside for a while. But don’t hold your breath. Economic growth in the euro-zone will not be positive in the second quarter, and leading indicators suggest that we are a long way from a more lasting pick-up in economic activity.