ECRI 20 Country Long Leading Index Signaling Global Upturn
Somewhat surprising given what is clearly a significant slowdown - if not outright 'Growth Recession' - in the states, the Economic Cycle Research Institute finds their proprietary Long Leading indexes are pointing towards a turn-around later this year on a global scale in both growth and pricing power.
If correct, it seems plausible that the US might skirt an outright recession this year, but it looks super close.
Surf's Up
In sharp contrast with the Wall Street consensus last July that global growth would accelerate, ECRI was warning of an impending global slowdown. Accordingly, growth in the Journal of Commerce (JoC)-ECRI Industrial Price Index (IPI)* peaked in July (Chart 1), before starting its sharp decline. By the fall Wall Street became wise to the downturn in energy prices in particular, focusing on supply concerns. However, the decline in IPI growth to a 70-month low early this year makes it clear that a broad industrial downturn was underway, hurting the prices of many other industrial commodities, including primary metals...
Today, the welcome news is that the long leading index has turned up, and the coincident index is starting to follow suit, with the revival being led by economies where exchange rate weakness is acting as a tailwind (Japan and the Eurozone), while being less evident in the U.S. where dollar strength is a headwind... Full article here. Credit: ECRI
If correct, it seems plausible that the US might skirt an outright recession this year, but it looks super close.
Surf's Up
In sharp contrast with the Wall Street consensus last July that global growth would accelerate, ECRI was warning of an impending global slowdown. Accordingly, growth in the Journal of Commerce (JoC)-ECRI Industrial Price Index (IPI)* peaked in July (Chart 1), before starting its sharp decline. By the fall Wall Street became wise to the downturn in energy prices in particular, focusing on supply concerns. However, the decline in IPI growth to a 70-month low early this year makes it clear that a broad industrial downturn was underway, hurting the prices of many other industrial commodities, including primary metals...
Today, the welcome news is that the long leading index has turned up, and the coincident index is starting to follow suit, with the revival being led by economies where exchange rate weakness is acting as a tailwind (Japan and the Eurozone), while being less evident in the U.S. where dollar strength is a headwind... Full article here. Credit: ECRI