Just 2 short weeks ago, Goldman nervously admitted that possibly perhaps maybe their Global Leading Indicator was indicating a "slowdown" was coming [5], but remained hopeful that the rest of the month would see data pick up and prove them wrong. Now that the final data has been released for the various components of the index, the 'exuberant' recovery of the last few months has been massively revised lower. As Goldman itself notes, the September Final GLI came in at 2.6% YoY, providing a clear signal of "Slowdown", with the data now in hand further suggesting that the GLI first may have entered the ‘Slowdown’ phase back in July.
Via Goldman Sachs,
The September Final GLI came in at 2.6%yoy, a decline relative to the August reading. Momentum decreased to 0.15%mom relative to last month’s reading of 0.29%. Although the degree of deceleration remains quite modest, the September GLI print provides a clear signal of ‘Slowdown’, with the data now in hand further suggesting that the GLI first may have entered the ‘Slowdown’ phase back in July.
This comes after an initial August reading that still placed the GLI in ‘Expansion’, but very close to Slowdown, and after both the September and August Advanced GLI readings placed the cycle in the ‘Slowdown’ phase.
Red arrows show the revisions from last month...
[6]
Components mixed
Six of the ten underlying components of the GLI worsened in September. Three of last month’s four improving components came in softer.
[7]
The September Final GLI places the global industrial cycle in the ‘Slowdown’ phase, which is defined by positive but decreasing momentum. This may be driven by some data coming in lower after fairly high prints in previous months, such as the Global PMI and NOIN. Along with the Advanced GLI readings in August and September, which located the GLI in ‘Slowdown’, this Final GLI reading comes in a broader context of stable and compressed growth, where small changes may lead to shifts in cycle phases.
