The shape of a “late-cycle cyclical recovery”

That has been misdesignated “synchronized global recovery”. What we observe, however, is simply an “offset” to the previous slowdown.

The pattern shows up in the IMF´s world growth data.

It is also present in higher frequency global economic activity data – world industrial production & world trade. In both cases, the “recovery” seems to have run its course and danger, in the form of “trade wars” lurks ahead!

In the U.S., the pattern also shows up. I´ll posit that the process is driven by nominal spending (NGDP) growth, in other words, by monetary policy.

And is reflected in economic activity data such as industrial production and retail sales.

With the “recovery” appearing to be fading, the Fed´s newfound hawkishness flashes “amber lights.”

In fact, for the US & G7 economies, the FMI forecasts a slowdown in the coming years!


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