Posts tagged geopolitics
Plenty to worry about

It has been three weeks since I last updated these pages, and as I leaf through my charts, I am tempted to conclude that nothing substantial has changed. In the global economy, headline leading indicators signal stable and relatively robust growth. The first chart below shows that my diffusion index of macroeconomic leading indicators is rising gently, indicating that the pace of industrial production growth in the major advanced economies will rise to slightly above 4% year-over-year in the next few months. The two following charts show individual leading indicators in the large economies. They are all rising year-over-year, and momentum has accelerated, with the notable exception of the U.K's leading index still stuck below zero. Finally, I throw in charts of real M1 growth—arguably the best single macroeconomic leading indicator—and these data also are constructive. We have to watch the slowdown in China, but M1 growth rose in July, which does not suggest a liquidity crunch, at least not in Q3. 

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