Is it V for victory? ISM purchasing managers’ surveys from around the world confirm that the biggest economies have followed China’s lead to complete a sharp rebound from their intense post-Lehman recession. Worrying indications in the early summer suggested that the ISM, a reliable indicator of gross domestic product growth, was sliding back towards the 50 level that marks the dividing line between recession and expansion. But now the UK seems never to have had it so good, registering a record 58.1, equal with Germany, while both China and the US are comfortably above 50. Only peripheral eurozone countries such as Spain are still stuck at recessionary levels.

The ISM is not the only data series in the developed world to show clear improvement in the past few months. Since late August – perhaps coincidentally, when Ben Bernanke started floating the idea of QE2 bond purchases – data have been steadily better than expected. This might explain the recovery in risky assets just as well as the promise of fresh easy money from the Federal Reserve. There is also room for encouragement from the market’s strong reaction to the data. Even though a good ISM increases the chances that QE2 might be curtailed, investors cared more about economic strength. Even if the market has set itself up for negative surprises from the European Central Bank’s announcement on Thursday, and US payrolls on Friday, this is healthy.

However, celebrations are not yet warranted. The ISM’s index of new orders fell while its inventories number rose, leaving inventories exceeding new orders. Over history, this usually indicates an oncoming recession. At least it suggests that the business cycle has still not regained its kilter after its shock at the end of 2008. A return to sub-50 ISM readings cannot be ruled out, while unexciting growth seems more likely than any boom. And while the data are doubtless encouraging, there is still a possibility that the V turns into the first half of a W.