The Consumer Metrics Institute Growth Index & GDP

One of my favorite charting sites is dshort.com (that's both the site name and URL). Here they map the Growth Index as defined by the Consumer Metrics Institute vs. GDP (gross domestic product). As you can see, the Growth Index (blue line) is a pretty decent leading indicator of GDP (red line), by about a quarter — not perfect, but decent (h/t LiveJournal's Recession community).


Just a heads-up. If the GDP follows the Growth Index into negative territory, there's not much consumer demand to pick it up.

The stimulus (small as it was) is mainly gone, states are headed belly-up, the Obama–Peterson–Pelosi Deficit Commission will hack the safety net, and only tax cuts for Our Betters is on the table. (And as this nearly impenetrable post by Paul Krugman points out, Big Boy tax cuts are almost no stim at all. Hint: The last three paragraphs are all you need.)

Again, the Growth Index is not a perfect predictor, but it's decent. Explanatory text and more pretty pictures here.

GP