Hopefully putting to an end for at least a few months any still latent confusion over whether there “coordinated global growth” ended some time ago, Goldman reports that the Y/Y growth of its proprietary headline Global Leading Indicator (GLI), supposedly a more accurate proxy of the economy than GDP, growth decreased to 2.62% in April, down from the bank’s March estimate of 2.87%.
On a month-over-month basis the move was even more pronounced, with March GLI momentum decreasing to 0.026% in April from 0.041% in February, the lowest level since 2011.
Here, Goldman’s Charles Himmelberg writes that this signal “is consistent with the moderation in global growth evident in our other activity indicators”.
Digging through the assorted components that make up Goldman’s GLI, half of the ten underlying GLI components strengthened in April. The two financial, i.e. market driven, variables showed the largest increases as the GS industrial metals index and the AUD & CAD TWIs increased by half a standard deviation.
That was the good news. The bad news is that the components that weakened, weakened more significantly. The Japan IP inventory/sales ratio fell one and a half standard deviations while both the Belgian and Netherlands manufacturing surveys and Korean exports softened by half a standard deviation.
Putting it all together, here is Goldman’s infamous swirlogram.
Finally, for those who haven’t read our previous posts tracking the evolustion of the FLI, Goldman explains that the GLI is a Goldman Sachs proprietary indicator “that is meant to provide an early signal of the global industrial cycle on a monthly basis.” It was introduced in 2002 and has been revised twice since then, in 2006 and 2010.