The world is headed for an economic slowdown, according to the Economic Cycle Research Institute's (ECRI) Long Leading Index of global industrial growth.
"It is not country specific, but imagine if you could add up all the activity in factories around the world and see if it was accelerating or decelerating, that is what this indicator is focused on," says Lakshman Achuthan founder and managing director of the research center. "And it has been telling us very clearly, unambiguously, that we have a peak in global industrial growth this summer."
Take a look at the institute's chart here. The downturn follows in lock-step the fall in short-term indicators like ISM survey and the ECRI's Industrial Commodity Inflation index.
Also of note in ECRI's recent data is its future inflation gauge, which excludes commodities. This index had been inching up since last year until last month, says Achuthan, when the index dropped two points, or a little less than two percent.
Why does this matter?
Read More »from Global Slowdown to Hit by Summer, Even for U.S., Says Achuthan