Big 3 PMI falls again in July

The chart shows the GDP-weighted average of the country PMIs which have been released so far for July (China not yet available), compared with my calculation of the average weighted industrial production for these three countries, shown as a year-on-year percentage change.  The PMI suggests that the modest rebound in IP over the last couple of months is likely to be followed by a further decline.

The average PMI is below the 50 % "recession line", and the year-on-year change in IP is flirting with the zero line.  Even if there is a rebound in the US, we have yet to see data confirming that there is a similar recovery outside the US.

Will there be a rebound in the US?

In the chart below, I've plotted my US leading index as a deviation from trend, with a 12 month lag, compared with the average of the ISM and PMI surveys.  (Note we haven't got July's ISM, yet).  From 2011-2015, the lag between my leading index and the ISM/PMI indicator was about a year.  In 2016, the ISM/PMI indicator turned up early, and in 2018/2019, the economy (i.e., the ISM/PMI) turned down a little bit earlier than it might otherwise have done (based on my leading index), as the Trump fiscal stimulus faded and as the trade wars affected confidence and demand.

If the 1 year lag holds, the US economy should bottom in early 2020.  Observe also that my leading index is a lower now than it's been since the GFC  ("Great Recession"), which, pari passu, implies that the economy should be lower too.  My longer-leading US index also suggests a recovery in 2020.  So, on balance, the little rebound we've seen in some US indicators probly does not mean that the US slowdown is over, yet.   "I need more data, dammit!" (Miles Vorkosigan)