Economic Outlook: OECD's split decision

The Organization of Economic Cooperation and Development said Thursday Europe and the United States would go their separate ways in 2012.

In the group's latest Interim Economic Assessment, OECD said economic growth in the first half of the year "is expected to be firmer through the first half of 2012, but the recovery remains fragile and will likely proceed at different speeds in North America and Europe."

In short, OECD Chief Economist Pier Carlo Padoan said, the first half of 2012 would be marked by "robust growth in the United States and Canada, but much weaker activity in Europe."

That said, "We may have stepped back from the edge of the cliff, but there's still no room for complacency," Padoan said in a presentation in Paris.

The numbers define robust as not exactly unshakable. With employment on the rebound and consumer confidence on the rise, growth is projected to reach 2.9 percent in the first quarter of the year and 2.8 percent in the second quarter in the United States.

OECD also points to higher stock prices and credit growth, both of which are "underpinning the recovery."

In Canada, the OECD said, growth would hit an even stride at 2.5 percent for both the first quarter and the second.

But what a difference two weeks make. Approximately, that's the last time encouraging data came down the line in the United States. Durable goods orders rose in February, but much of that was due to commercial airplane orders. "Robust," of course, is not the best definition for equity prices with the Dow Jones industrial average challenging the 13,000 point mark once again -- only this time threatening to duck back under the purely psychological barrier.

Be that as it may, the OECD also projects a split within Europe's economy. While not laying out a specific projection for the 17-member eurozone, OECD said on average the economies of Germany, France and Italy will contract 0.4 percent in the first quarter and grow 0.9 percent in the second quarter.

There's nothing robust in those numbers. And those projections cover the three largest economies in the eurozone. The next largest economy, Spain, is not only discouraging, but some analysts say a bailout for Spain is inevitable.

In Asia, Group of Seven nation Japan is forecast to see growth of 3.4 percent in the first half of the year. That is expected to drop to 1.4 percent in April through June.

In international markets Thursday, the Nikkei 225 index in Japan fell 0.67 percent while the Shanghai composite index in China lost 1.43 percent. The Hang Seng index in Hong Kong dropped 1.32 percent while the Sensex in India shed 0.37 percent.

The S&P/ASX 200 in Australia gave up 0.13 percent.

In midday trading in Europe, the FTSE 100 index in Britain slipped 0.98 percent while the DAX 30 in Germany lost 1.68 percent. The CAC 40 in France dropped 1.1 percent while the Stoxx Europe 600 lost 1.06 percent.