Global economic news has been generally encouraging during MoneyMovesMarkets' absence, with Asian industrial activity, in particular, rebounding impressively, partly on the back of resurgent Chinese domestic demand.

Today's US second-quarter GDP report continues the hopeful pattern, showing the economy's contraction slowing to 0.3%, or 1.0% at an annualised rate, from 1.6%, or 6.4% annualised, in the first quarter. Stronger net exports and government outlays partly offset further, though smaller, declines in personal consumption and capital spending.

Destocking rose further to 1.1% of GDP in the second quarter, which appears to be a post-war record (based on earlier data – figures released today extend back only to 1995). With final demand stabilising, firms should resist further declines in inventories, implying a significant boost to production during the second half.

Annual revisions show that the recession has been deeper than previously thought, with the fall in GDP by the first quarter of 2009 now put at 3.7% versus 3.1%. However, GDP is still estimated to have peaked in the second quarter of 2008 – at odds with the National Bureau of Economic Research's claim that the economy has been contracting since December 2007.

Recent corporate earnings news is consistent with improving global economic momentum. Equity analysts' revisions ratio, defined as the number of upgrades to 12-month-ahead forecasts minus downgrades expressed as a proportion of the total number of estimates, rose to its highest level since late 2007 last week and suggests further gains in purchasing managers' new orders indices – see chart.

The 0.3% fall in US GDP last quarter compares favourably with a 0.8% decline in the UK, reported last week. The UK figure, however, is difficult to reconcile with business survey results – better in the UK than the US recently – and labour market indicators (see previous post on vacancies). A comparison with initial GDP estimates in prior recessions suggests that the UK numbers will eventually be revised higher – more on this next week.