2018.05.0300:46:00UTC+00Goldman, JPMorgan Expects Global Economic Rebound

The world economy showed signs of stabilizing after a recent moderation as manufacturing activity strengthened for the first time this year.

A purchasing managers index for factories across more than 40 countries increased to 53.5 in April from March's six-month low of 53.3, IHS Markit said. Gauges of production and new orders both increased, though export growth slowed.

The numbers reinforce the advice from economists at Goldman Sachs and JPMorgan Chase not to bet against the world economy just yet. They could calm investors who spent the early part of 2018 fretting about a trade war and fading global growth despite forecasts from the International Monetary Fund for the quickest growth this year since 2011.

Goldman Sachs recently said that they are looking for a 4.1 percent growth in 2018.

Nonetheless, there are still areas of concern. Growth in the euro area slowed to the weakest in six quarters in the first three months of the year. In manufacturing, while the U.S. PMI reached the highest since 2014, the eurozone fell its weakest in more than a year.

Among the reasons to stay optimistic are that activity may have been restrained in the early part of 2018 by one-off factors such as poor weather, an outbreak of flu in Germany, strikes in France and the timings of Easter and holidays in China.

U.S. President Donald Trump's tax cuts have also yet to fully take effect while tight labor markets should increasingly generate wage growth, supporting consumer confidence and spending. Central banks are signaling they will lean toward supporting demand by taking care to remove the record low interest rates of the past decade.