The darkest hour is just before dawn, the old saying goes. Of course, that's also when your house is most likely to get burgled.
The same mix of new hopes and old fears defines the global economy heading into the fourth quarter.
Those who glimpse a bright day breaking are looking past a grim flow of data to a stronger 2013. The U.S. housing recovery is well entrenched, stock markets have had a good three months and both the Federal Reserve and the European Central Bank have ripped up the rule books to prop up their economies.
But those alert to lurking dangers retort that unprecedented central bank activism is impotent when the world is in a liquidity trap; households and governments will be paying down excess debt for years to come.
A raft of business surveys in Europe and America, leading up to the monthly U.S. employment report on Friday, is likely to provide grist for both mills.
Julian Callow, chief European economist for Barclays Capital in London, said central banks were addressing a significant number of tail risks, but other threats lingered.
"It's not a climate in which we can feel especially gung-ho about the economic recovery," he said.
According to 80 economists polled by Reuters, non-farm jobs probably rose by 115,000 in September, barely more than the tepid 96,000 figure in August that prompted the Fed to launch a third round of asset purchases to bring down bond yields.
But a strike by Chicago teachers will have depressed the headline number. Stripping it out, the private sector is forecast to have added 130,000 workers, up from 103,000 in August. Not great, but heading in the right direction.
A pair of surveys by the U.S. Institute of Supply Management is likely to paint a similarly blurred picture. Economists expect a small pick-up in manufacturing to be offset by a dip in services.
The reports will be scrutinised especially closely this month for signs that businesses are growing nervous about a huge package of spending cuts and tax increases that will take effect automatically in January unless politicians agree how to cut the budget deficit by $1.2 trillion over 10 years.
"Uncertainty about U.S. fiscal policy is the single biggest near-term threat to the global recovery," Fitch Ratings said.
Bank of America Merrill Lynch added that the 'fiscal cliff' was the No. 1 concern of its investors. Some economists think a lack of clarity over the outcome is already being reflected in weak orders for durable goods. The tightening would be equal to 4 percent of annual output.
Yet J.P. Morgan said 52 percent of the corporate clients it surveyed globally replied that the issue was making no difference to their investment plans; none reported a 'significant impact'.
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Europe is no more clear-cut.
Final September surveys of purchasing managers are likely to confirm the euro zone is mired in recession.
But Berenberg Bank said that, thanks to the ECB, the 17-nation bloc was close to an inflection point; rebounding growth in narrow money pointed to renewed growth by spring at the latest.
Similarly, Deutsche Bank expects the eurozone economy to bottom out before the end of 2012 as the credit crunch eases. By this time next year, output could be expanding at a 1 percent pace.
"But with a poor economic outlook and still considerable political uncertainty, we see a high risk of a return to serious tensions in EMU (economic and monetary union) in the coming months," the bank's economists said in a report.
After a dramatic pledge last month to buy the bonds of struggling euro zone members that agree to tough reforms, the ECB is expected to hold steady when its policy council meets on Thursday, according to economists polled by Reuters.
They also expect no change this week from the Bank of England, although both central banks are likely to ease further by year's end.
In Australia, too, money markets are pricing in a rate cut, but economists think the central bank, which meets on Tuesday, will wait a while to pull the trigger.
The same goes for the Bank of Japan. Fresh from unexpectedly topping up its asset-buying and loan programme on Sept. 19, the BOJ is likely to hold off for now on further easing at a policy meeting that ends on Friday.
Ultimately, optimists say, determined central banks will prevail. Flooding their economies with cheap money will revive risk-taking and investment, generating demand and jobs.
But if, as British economist Andrew Smithers contends, monetary policy is "useless" under current conditions, the outlook is bleak.
For then only fiscal policy can engineer a recovery, yet the United States, Japan and Britain are no longer able to add to their deficits, while Germany and China do not want to, he said.
"The world may muddle through, but the chances of a serious and prolonged recession are exceptionally high," Smithers, head of an eponymous London consultancy, concluded in a report.
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