Growth‑Rate‑Cycle Classification (Four‑Phase Model)

The cycle is classified using year‑over‑year growth rates of key indicators:

Labour market: US.NFP, US.UNEM
Production: US.IPI
Demand: Housing + mortgage approvals
Liquidity: M4G, policy rates
Inflation: CPI, PPI
Markets: S&P 500, FTSE 100

1. Acceleration Phase

Characteristics:

NFP growth rising
IPI growth rising
Housing and mortgage approvals improving
Money supply growth stabilising or rising
Equity indices trending upward
Inflation stable or falling

Interpretation: Early‑cycle expansion; strongest forward returns.

2. Peak Growth Phase

Characteristics:

NFP still strong but slowing
IPI growth flattening
Housing momentum topping
Inflation rising
Policy tightening begins
Equity markets show divergence (breadth weakens)

Interpretation: Late‑cycle overheating; risk of reversal increases.

3. Deceleration Phase

Characteristics:

NFP slowing sharply
Unemployment bottoming then rising
IPI contracting
Housing and mortgage approvals falling
Money supply growth weakening
Equity markets rolling over
Inflation peaking

Interpretation: Cycle downturn; recession risk elevated.

4. Trough / Early Recovery Phase

Characteristics:

NFP stabilising at low levels
IPI bottoming
Housing stabilising
Policy easing begins
Money supply growth turning up
Equity markets bottoming and beginning to lead

Interpretation: Transition to recovery; best forward returns

Country	Ticker	Name	Direction_for_Growth	Importance
US	US.DJI	Dow Jones Industrial Average	Positive	High
US	US.SP5C	S&P 500 Index	Positive	Very High
US	US.CPI	Consumer Price Index	Negative when rising	High
US	US.UNEMP	Unemployment Rate	Negative when rising	High
US	US.HPI	House Price Index	Positive	High
US	US.RETAIL	Retail Sales Index	Positive	Very High
US	US.PMI	Purchasing Managers’ Index	Positive	Very High
UK	UK.30.100	FTSE 100 Index	Positive	Medium
UK	UK.CPI	Consumer Price Index	Negative when rising	High
UK	UK.UNEMP	Unemployment Rate	Negative when rising	Medium
UK	UK.HPI	House Price Index	Positive	Very High
UK	UK.RETAIL	Retail Sales Index	Positive	High
UK	UK.PMI	Purchasing Managers’ Index	Positive	High
EU	EU.STOXX50	Euro Stoxx 50 Index	Positive	High
EU	EU.CPI	Consumer Price Index	Negative when rising	Very High
EU	EU.UNEMP	Unemployment Rate	Negative when rising	Medium
EU	EU.PMI	Purchasing Managers’ Index	Positive	Very High
EU	EU.RETAIL	Retail Sales Index	Positive	High
Japan	JP.N225	Nikkei 225 Index	Positive	High
Japan	JP.CPI	Consumer Price Index	Negative when rising	Medium
Japan	JP.UNEMP	Unemployment Rate	Negative when rising	High
Japan	JP.HPI	House Price Index	Positive	Medium
Japan	JP.PMI	Purchasing Managers’ Index	Positive	Very High
China	CN.SSEC	Shanghai Composite Index	Positive	High
China	CN.CPI	Consumer Price Index	Negative when rising	Medium
China	CN.PPI	Producer Price Index	Positive	Very High
China	CN.UNEMP	Unemployment Rate	Negative when rising	Medium
China	CN.PMI	Purchasing Managers’ Index	Positive	Very High
China	CN.RETAIL	Retail Sales Index	Positive	High

Positive indicators

Equity indices, PMIs, retail sales, house prices, and PPI (China) all rise during expansions and lead turning points.

Negative indicators

Inflation (CPI) and unemployment rise during slowdowns and recessions, signalling deteriorating conditions.

High‑importance indicators

These are the core cycle drivers:

Retail Sales (demand)
PMI (production)
Equity Indices (forward earnings)
House Prices (credit conditions)
PPI (China) (industrial profits)
CPI (policy turning points)

Medium‑importance indicators

Useful but not primary drivers:

Unemployment (lagging)
FTSE 100 (global exposure)
Japan CPI (low volatility)

This system converts a broad set of macroeconomic and market indicators into country‑level growth‑rate cycles . Each ticker is grouped by country, its economic meaning is clarified, and its directional impact on growth is defined:

Positive for growth: rising values indicate strengthening economic momentum
Negative for growth: rising values indicate weakening momentum
Neutral/confirmatory: useful for cycle confirmation rather than leading signals

Each series is transformed into a smoothed YoY growth rate, standardised, and aggregated into a country composite. These composites are then classified into four regimes: Expansion, Slowdown, Recession, Recovery.

🇺🇸 UNITED STATES

US.DJI — Dow Jones Industrial Average

Meaning: Large‑cap industrial equity index. Direction: Positive — rising equity prices signal stronger earnings expectations and risk appetite. Importance: High‑frequency forward indicator of business sentiment.

US.SP5C — S&P 500 Index

Meaning: Broad US equity benchmark. Direction: Positive — rising S&P 500 reflects improving corporate profitability and liquidity conditions. Importance: One of the strongest forward indicators in the entire dataset.

US.CPI — Consumer Price Index

Meaning: Inflation measure. Direction: Negative when rising — higher inflation erodes real income and triggers tightening. Importance: Critical for identifying demand‑pressure turning points.

US.UNEMP — Unemployment Rate

Meaning: Labour‑market slack. Direction: Negative when rising — higher unemployment signals recessionary conditions. Importance: Strong confirmation indicator; lags turning points.

US.HPI — House Price Index

Meaning: Residential property prices. Direction: Positive — rising house prices reflect strong credit conditions and consumer wealth. Importance: Early‑cycle indicator; sensitive to interest rates.

US.RETAIL — Retail Sales Index

Meaning: Consumer spending. Direction: Positive — rising retail sales indicate strong demand. Importance: Core Ellis indicator; consumption drives most US GDP.

US.PMI — Purchasing Managers’ Index

Meaning: Business sentiment survey. Direction: Positive — rising PMI signals expanding production. Importance: One of the best leading indicators of turning points.

🇬🇧 UNITED KINGDOM

UK.30.100 — FTSE 100 Index

Meaning: Large‑cap UK equity index. Direction: Positive — rising FTSE reflects stronger global and domestic conditions. Importance: Moderate; FTSE is globally exposed, so less tied to UK domestic demand.

UK.CPI — Consumer Price Index

Meaning: UK inflation. Direction: Negative when rising — squeezes real incomes. Importance: High; UK is sensitive to inflation‑driven rate cycles.

UK.UNEMP — Unemployment Rate

Meaning: Labour‑market slack. Direction: Negative when rising — signals weakening demand. Importance: Confirmation indicator.

UK.HPI — House Price Index

Meaning: Residential property prices. Direction: Positive — rising HPI indicates strong credit and consumer confidence. Importance: Very strong early‑cycle indicator in the UK.

UK.RETAIL — Retail Sales Index

Meaning: Consumer spending. Direction: Positive — rising retail sales reflect stronger domestic demand. Importance: Core Ellis demand indicator.

UK.PMI — Purchasing Managers’ Index

Meaning: Business sentiment. Direction: Positive — rising PMI signals expansion. Importance: Strong leading indicator.

🇪🇺 EURO AREA

EU.STOXX50 — Euro Stoxx 50 Index

Meaning: Eurozone large‑cap equity index. Direction: Positive — rising equity prices reflect improving earnings and liquidity. Importance: Strong forward indicator of financial conditions.

EU.CPI — Consumer Price Index

Meaning: Eurozone inflation. Direction: Negative when rising — reduces real income and triggers ECB tightening. Importance: High; eurozone cycles are heavily influenced by inflation shocks.

EU.UNEMP — Unemployment Rate

Meaning: Labour‑market slack. Direction: Negative when rising — signals recession. Importance: Confirmation indicator; slow to turn.

EU.PMI — Purchasing Managers’ Index

Meaning: Industrial and services sentiment. Direction: Positive — rising PMI indicates expansion. Importance: One of the strongest leading indicators for the eurozone.

EU.RETAIL — Retail Sales Index

Meaning: Consumer spending. Direction: Positive — rising retail sales indicate stronger demand. Importance: Key demand‑side indicator.

🇯🇵 JAPAN

JP.N225 — Nikkei 225 Index

Meaning: Major Japanese equity index. Direction: Positive — rising Nikkei reflects stronger earnings and yen‑driven liquidity. Importance: Strong forward indicator.

JP.CPI — Consumer Price Index

Meaning: Japanese inflation. Direction: Negative when rising — reduces real income; signals policy tightening. Importance: Moderate; Japan’s inflation is structurally low.

JP.UNEMP — Unemployment Rate

Meaning: Labour‑market slack. Direction: Negative when rising — signals downturn. Importance: High because changes are rare and meaningful.

JP.HPI — House Price Index

Meaning: Residential property prices. Direction: Positive — rising HPI indicates stronger domestic demand. Importance: Moderate early‑cycle indicator.

JP.PMI — Purchasing Managers’ Index

Meaning: Business sentiment. Direction: Positive — rising PMI signals expansion. Importance: Very strong for Japan’s export‑driven cycle.

🇨🇳 CHINA

CN.SSEC — Shanghai Composite Index

Meaning: Broad Chinese equity index. Direction: Positive — rising SSEC reflects improving liquidity and policy expectations. Importance: High; China’s markets are policy‑sensitive.

CN.CPI — Consumer Price Index

Meaning: Inflation. Direction: Negative when rising — reduces real demand. Importance: Moderate; deflation risk is often more important.

CN.PPI — Producer Price Index

Meaning: Factory‑gate prices. Direction: Positive — rising PPI signals stronger industrial demand and profits. Importance: Very strong leading indicator for China’s industrial cycle.

CN.UNEMP — Unemployment Rate

Meaning: Urban unemployment. Direction: Negative when rising — signals weakening demand. Importance: Confirmation indicator.

CN.PMI — Purchasing Managers’ Index

Meaning: Manufacturing and services sentiment. Direction: Positive — rising PMI indicates expansion. Importance: One of the strongest leading indicators for China.

CN.RETAIL — Retail Sales Index

Meaning: Consumer spending. Direction: Positive — rising retail sales indicate stronger domestic demand. Importance: Critical for tracking China’s shift toward consumption‑led growth.