US Macro Weakest Since July 2011 As Goldman Affirms Global Economy In Contraction

Goldman's Global Leading Indicator (GLI) final print for February affirms the global economy has entered a contraction with accelerating negative growth. Just six months after "expansion", the Goldman Swirlogram has collapsed into "contraction" with monthly revisions notably ugly and 9 out of 10 components declining in February. Some have suggested, given US equity's strong February (buyback-driven) performance, that the US economy will decouple from the world... or even drive it.. but that is 100% incorrect. US Macro data has fallen at its fastest pace in 3 years and is at its weakest level since July 2011 as 42 of 48 data items have missed since the start of February.


With 9 of 10 components negative in February, Goldman's Swirlogram has collapsed from expansion to contraction within just 6 months...


First negative print since 2012 - indicating global industrial production is set to contract...

What is the GLI: The Global Leading Indicator (GLI) is a Goldman Sachs proprietary indicator that is meant to provide an early signal of
the global industrial cycle on a monthly basis. There is an Advanced reading for each month, released mid-month, followed by the Final reading, released on the first business day of the following month.

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But for those who look at US stocks and somehow believe America is an island economy capable of decoupling from the world... think again - it's all a lead-lag cycle and the global contraction blowback is boomeranging back to US data...

Today was ugly... nowhere worse than spending...

For the first time since Q1 2009 (i.e. post Lehman), we have just had back to back drops in consumer spending...


The Bloomberg US Macro Surprise Index just dropped - after today's dismal data showing - to its lowest absolute level since July 2011. The last 3 months have seen it fall at the fastest pace sinceJuly 2012. Notice the lower peaks and lower troughs on each cycle since 2012...

Note: this index tracks not just miss/beat but absolutepositive or negative data items - key to the cyclical aspect is the over-optimism and over-pessimism of economist's forecasts. The last 3 years (lower peaks and lower troughs) suggest economists are strongly biased to over-optimistic forecasts and normally this kind of drop woul dhave stopped but economists continue to look for hockey-sticks which, perhaps, in this case will be absent (and have been for a month).

But of course that doesn't matter...


A reminder of how this happened (clue: non-economic buyers)...


From the start of February...


  1. Personal Spending
  2. Construction Spending
  3. ISM New York
  4. Factory Orders
  5. Ward's Domestic Vehicle Sales
  6. ADP Employment
  7. Challenger Job Cuts
  8. Initial Jobless Claims
  9. Nonfarm Productivity
  10. Trade Balance
  11. Unemployment Rate
  12. Labor Market Conditions Index
  13. NFIB Small Business Optimism
  14. Wholesale Inventories
  15. Wholesale Sales
  16. IBD Economic Optimism
  17. Mortgage Apps
  18. Retail Sales
  19. Bloomberg Consumer Comfort
  20. Business Inventories
  21. UMich Consumer Sentiment
  22. Empire Manufacturing
  23. NAHB Homebuilder Confidence
  24. Housing Starts
  25. Building Permits
  26. PPI
  27. Industrial Production
  28. Capacity Utilization
  29. Manufacturing Production
  30. Dallas Fed
  31. Chicago Fed NAI
  32. Existing Home Sales
  33. Consumer Confidence
  34. Richmond Fed
  35. Personal Consumption
  36. ISM Milwaukee
  37. Chicago PMI
  38. Pending Home Sales
  39. Personal Income
  40. Personal Spending
  41. Construction Spending
  42. ISM Manufacturing


  1. Markit Services PMI
  2. Nonfarm Payrolls
  3. JOLTS
  4. Case-Shiller Home Price
  5. Q4 GDP Revision (but notably lower)
  6. Markit Manufacturing PMI

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Of course, earnings expectations are not encouraging...

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But apart from that... everything is awesome.