Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. These days I'm retired, and I can't by law give you advice. While I do make mistakes, I try hard to do my analysis thoroughly, and to make sure my data are correct (old habits die hard!) Also, don't ask me why I called it "Volewica". It's too late, now.

BTW, clicking on most charts will produce the original-sized, i.e., bigger version.

Friday, March 16, 2012

My Coinciding Index & GDP

The problem with GDP is that it is such a comprehensive measure.  Everything goes into the pot: spending, production, incomes, trade, inventories.  That's a problem?  Yes, because it means that preliminary estimates of GDP tend to be revised after newer and better data become available.

So I watch my coinciding index as a good and timely guide to GDP.

Click to enlarge

There's a bit of a gap opened up between the COI and GDP.  Has my trusty indicator stopped working?  I suspect not.  In fact, I think it's because GDP will be revised upwards in a year or two, as the results of census data become available.  The latest couple of years of GDP data are always a work in progress.  The reason for the excellent fit in the past is because GDP data have by now been revised.  But my COI has not been substantially revised -- seasonal factors have shifted a little, and some of the component data have been tweaked.

The US economy is quite strong.

Pity about Europe.

[Oh, and yes, my programs are working again]

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