After the last FOMC meeting, we constructed an index in an attempt to see the total impact from the most relevant economic releases over a time line.
For the USת the Index is weighted among the following data releases: Consumer Prices, GDP growth, Current Account, Industrial Production, Unemployment Rate, Retail Sales, Consumer Confidence, ISM Manufacturing and Non-Manufacturing, where CPI and Core CPI both are known, the two have been weighted 50/50 between them.
Most of the releases are monthly with the exemption of the GDP growth rate, which is quarterly where YoY and MoM figure both are released. The YoY figure is used where a preliminary release is seen first and a revised figure is to follow and the revised figure is used; Markit PMI releases are used for the Euro area - where known – or the alternative Business Confidence/Sentiment and Consumer Confidence, if Markit is not known. For the US we have replaced Markit Manufacturing PMI and Services PMI with ISM Manufacturing and Non-Manufacturing.
The index has an initial value of 100.00, which is set as the average value of the 12 last monthly releases leading up to January 31, 2015 with the exemption of GDP growth for which we have used the last 4 quarterly releases.
The US ECONOMIC RELEASE Index as per March 13 stood at 101.69, which is not a substantial improvement on the average seen over the last 12 months.
In fact – I find it rather disappointing given that the indexes for some Euro area countries are as follows:
· Euro area 110.98
· Germany 115.24
· France 98.47
· Spain 142.41
· Greece 92.46
The index is only valid for each country as seen over a time line. The index tells very little about relative strength in between countries.