Slowing Global Growth Continues

As regular readers know, we are fans of Citi’s Economic Data indices, which can be broken down into the following components:

Data Change – Consensus Estimates = Surprise Index

The Data Change indices take incoming economic series and compare them to their previous one-year average. Zero denotes the one-year average, so anything below zero indicates growth is lower than the one-year average.

Consensus Estimates compare median economic forecasts to their one-year average.

The Surprise Index is simply the difference between the Data Change index and Consensus Estimates.

Latest Data Change Measures

We prefer to look at the Data Change indices themselves as they give the best indication of where various economies stand in relation to growth over the past year. As the chart below shows, the global growth trend is becoming a bigger concern, particularly so in Europe.

China’s growth is also becoming a serious concern. Even their admittedly controversial GDP data is now at its worst level since the Great Recession (2008).

Citi’s Data Change Index for China continues to go the wrong way.

For some countries, Citi separates the Data Change indices between hard (official) data and soft (survey) releases. The charts below highlight this data for the US and the EU. Soft survey data in particular is horrific.

Simply put, sentiment surrounding the US and EU economies is currently as bad as ever in the post-crisis era.

When comparing economic data to its one-year average, growth continues to show signs of a slowing global economy.