Four‑Phase Growth‑Rate‑Cycle

The cycle is defined using year‑over‑year growth rates across labour markets, production, demand, liquidity, inflation, and financial markets. These indicators collectively determine the economy’s position within one of four phases.

1. Acceleration Phase

NFP and IPI growth rising
Housing and mortgage approvals improving
Money supply stabilising or rising
Equity indices trending upward
Inflation stable or falling Interpretation: Early‑cycle expansion; strongest forward returns.

2. Peak Growth Phase

NFP strong but slowing
IPI flattening
Housing momentum topping
Inflation rising; policy tightening begins
Equity‑market breadth weakens Interpretation: Late‑cycle overheating; reversal risk increases.

3. Deceleration Phase

NFP slowing; unemployment turning up
IPI contracting
Housing and mortgage approvals falling
Money‑supply growth weakening
Equity markets rolling over
Inflation peaking Interpretation: Downturn; recession risk elevated.

4. Trough / Early Recovery Phase

NFP stabilising at low levels
IPI bottoming
Housing stabilising
Policy easing begins
Money‑supply growth turning up
Equity markets bottoming Interpretation: Transition to recovery; strong forward returns.

Indicator Direction & Importance

Positive for growth: equity indices, PMIs, retail sales, house prices, China PPI
Negative for growth: CPI (inflation), unemployment
High‑importance drivers: retail sales, PMI, equity indices, house prices, China PPI, CPI
Medium‑importance drivers: unemployment, FTSE 100, Japan CPI

Each series is transformed into a smoothed YoY growth rate, standardised, and aggregated into a country composite, which is then mapped into the four phases.

Below, each country’s indicators are ranked from most important to least important

USA (Ranked)

Rank	Ticker	Name	Role vs cycle	Primary use for forecasting
1	US.IPI	Industrial Production	Coincident/early	Core real‑activity gauge
2	US.NFP	Non‑Farm Payrolls	Coincident/early	Labour demand turning points
3	US.GSPC	S&P 500 Index	Leading	Market‑implied expectations
4	US.INTT	Fed Target Rate	Leading (policy)	Policy stance & tightening
5	US.INTM	Fed Effective Rate	Leading (financial)	Actual financial conditions
6	US.CPI	Consumer Price Index	Lagging/constraint	Inflation & policy pressure
7	US.UNEM	Unemployment Rate	Lagging	Depth/confirmation of slump
8	US.GDP	Gross Domestic Product	Lagging/coincident	Cycle confirmation, not lead
9	US.ERI	Exchange Rate Index	Mixed	External drag/boost
10	US.DJI	Dow Jones Index	Leading	Redundant with S&P 500
11	US.POP	Population	Structural	Not cyclical at YoY horizon

1. US.IPI – Industrial Production (top‑tier, core real‑time cycle gauge)

YoY falling sharply / turning negative: Strong signal of slowdown or recession in progress.
YoY rising / re‑accelerating from low levels: Recovery or early expansion.

2. US.NFP – Non‑Farm Payrolls

YoY growth decelerating (still positive but slowing): Early warning that the expansion is tiring.
YoY near zero or negative: Labour market rolling over—high recession risk or recession.
YoY re‑accelerating from weak levels: Recovery gaining traction.

3. US.GSPC – S&P 500 Index

YoY equity returns falling / negative: Markets pricing weaker future earnings and growth—often leads the real cycle.
YoY strong positive: Risk‑on, improving expectations for growth.

4. US.INTT – Fed Target Rate

YoY higher (aggressive hiking vs a year ago): Tighter policy—raises probability of future slowdown/recession with a lag.
YoY lower (cuts vs a year ago): Policy support—often coincides with late‑recession/early‑recovery.

5. US.INTM – Fed Effective Rate

YoY higher: Confirms tighter actual financial conditions; amplifies downside risk to future activity.
YoY lower: Looser conditions; supports future growth, especially credit‑sensitive sectors.

6. US.CPI – Consumer Price Index

YoY high and rising: Late‑cycle overheating; increases odds of further tightening.
YoY falling (disinflation) from high levels: Often associated with slowdown or early recession.
YoY very low/deflationary: Typically recessionary or post‑crisis environment.

7. US.UNEM – Unemployment Rate

YoY rising: Clear sign the downturn is underway or deepening—lagging but powerful confirmation.
YoY falling: Ongoing expansion or recovery; not a good early warning of peaks.

8. US.GDP – Gross Domestic Product

YoY slowing / turning negative: Confirms slowdown or recession, but usually after markets and high‑frequency data.
YoY re‑accelerating: Confirms recovery already visible in faster indicators.

9. US.ERI – Exchange Rate Index

YoY appreciation (stronger currency): Headwind to net exports; can reinforce slowdown if domestic demand is soft.
YoY depreciation (weaker currency): Supportive for net exports; can cushion or extend expansions.

10. US.DJI – Dow Jones Industrial Average

Directionally similar to US.GSPC;
YoY negative: Same story—markets discounting weaker growth.
Lower marginal value if you already use S&P 500.

11. US.POP – Population

YoY moves slowly; structural, not cyclical.
Useful for long‑run potential growth, not for business‑cycle timing.

🇬🇧 United Kingdom (Ranked)

Ticker	Name	Rank	Direction	Explanation
UK.IPI	Industrial Production	1	“YoY ↑ expansion / YoY ↓ slowdown”	“Core real‑economy signal; turns early in UK cycles”
UK.M4G	M4 % Growth Rate	2	“YoY ↑ liquidity / YoY ↓ credit tightening”	“Money growth leads UK activity by 6–12 months”
UK.EMP	Employment Level	3	“YoY ↑ strong labour demand / YoY ↓ weakening”	“Employment growth decelerates before unemployment rises”
UK.EMP%	Employment %	3	“YoY ↑ expansion / YoY ↓ rollover”	“Same labour‑demand signal; high‑frequency and reliable”
UK.CPI	Consumer Price Index	4	“YoY ↑ overheating / YoY ↓ disinflation”	“Drives BoE policy; inflation cycles lead real cycles”
UK.INTT	Base Rate	5	“YoY ↑ tightening / YoY ↓ easing”	“Policy stance leads credit	housing
UK.HMA	Mortgage Approvals	6	“YoY ↑ housing expansion / YoY ↓ housing slowdown”	“UK is housing‑sensitive; approvals lead house prices”
UK.HIN	House Price Index (Nationwide)	7	“YoY ↑ wealth effect / YoY ↓ demand contraction”	“Lagging vs approvals but key for consumption”
UK.HIL	House Price Index (Land Registry)	7	“YoY ↑ wealth effect / YoY ↓ contraction”	“Same as above; slower but broad coverage”
UK.HIH	House Price Index (Halifax)	7	“YoY ↑ wealth effect / YoY ↓ contraction”	“Another housing measure; similar cycle role”
UK.HAN	House Price Average (Nationwide)	7	“YoY ↑ wealth effect / YoY ↓ contraction”	“Household balance‑sheet channel”
UK.HAL	House Price Average (Land Registry)	7	“YoY ↑ wealth effect / YoY ↓ contraction”	“Lagging but important for demand”
UK.HAH	House Price Average (Halifax)	7	“YoY ↑ wealth effect / YoY ↓ contraction”	“Same cycle interpretation”
UK.PPI	Producer Price Index	8	“YoY ↑ cost pressure / YoY ↓ easing”	“Early inflation signal; affects margins”
UK.RPI	Retail Price Index	9	“YoY ↑ inflation / YoY ↓ disinflation”	“Less policy‑relevant than CPI but still informative”
UK.ERI	Exchange Rate Index	10	“YoY ↑ stronger GBP (drag) / YoY ↓ weaker GBP (boost)”	“External competitiveness channel”
UK.UNEM	Unemployment %	11	“YoY ↑ recession confirmation / YoY ↓ expansion”	“Very lagging; confirms downturns”
UK.GDPR	GDP Real	12	“YoY ↑ expansion / YoY ↓ slowdown”	“Lagging and revised; confirms cycle”
UK.GDP	GDP Nominal	12	“YoY ↑ expansion / YoY ↓ slowdown”	“Same as above; not a forecaster”
UK.BOT	Balance of Trade	13	“YoY ↑ improvement / YoY ↓ deterioration”	“Useful but noisy; not a primary cycle driver”
UK.GEXP	Government Expenditure	14	“YoY ↑ fiscal support / YoY ↓ fiscal drag”	“Policy‑driven; not a natural cycle indicator”
UK.GD%	Public Sector Debt %	15	“YoY ↑ fiscal stress / YoY ↓ consolidation”	“Structural	slow‑moving”
UK.GD	Public Sector Debt	15	“YoY ↑ debt accumulation / YoY ↓ consolidation”	“Structural	not cyclical”
UK.GCR	Public Sector Cash Requirement	15	“YoY ↑ borrowing / YoY ↓ improvement”	“Fiscal stance	not a cycle signal”
UK.POP	Population	16	“Minimal YoY movement”	“Structural; irrelevant for cycle timing”

Top‑Tier (Direct cycle forecasters)

1. UK.IPI — Industrial Production

Direction:

YoY ↓ → slowdown / recession
YoY ↑ → expansion / recovery Why: The most direct, high‑frequency measure of real economic activity. Tracks manufacturing and goods output, which turns early in UK cycles.

2. UK.M4G — M4 % Growth Rate

Direction:

YoY ↓ → tightening credit → future slowdown
YoY ↑ → expanding liquidity → future growth Why: Money growth is a classic UK leading indicator. Credit cycles lead real cycles by 6–12 months.

3. UK.NFP / UK.EMP / UK.EMP% — Employment metrics

(You have UK.EMP and UK.EMP%, but not NFP; UK uses employment rather than payrolls.) Direction:

YoY ↓ → labour demand weakening → downturn
YoY ↑ → strengthening labour market → expansion Why: Employment growth decelerates before unemployment rises. A reliable early‑cycle signal.

4. UK.CPI — Consumer Price Index

Direction:

YoY ↑ → late‑cycle overheating → BoE tightening risk
YoY ↓ → disinflation → slowdown or early recession Why: Inflation determines monetary policy. Rising CPI precedes rate hikes, which slow the cycle.

5. UK.INTT — Bank of England Base Rate

Direction:

YoY ↑ → tighter policy → future slowdown
YoY ↓ → easing → recovery support Why: Policy stance is a leading driver of UK credit, housing, and business investment cycles.

⭐ Second Tier (Strong but sector‑specific or lagging)

6. UK.HMA — Mortgage Approvals

Direction:

YoY ↓ → housing slowdown → broader downturn
YoY ↑ → housing recovery → early expansion Why: UK is a housing‑sensitive economy. Mortgage approvals lead house prices and consumption.

7. UK.HIN / UK.HIL / UK.HIH / UK.HAN / UK.HAL / UK.HAH — House Price Indices

Direction:

YoY ↓ → household wealth contraction → consumption slowdown
YoY ↑ → wealth effect → expansion Why: House prices are lagging relative to approvals but still important for UK demand cycles.

8. UK.PPI — Producer Price Index

Direction:

YoY ↑ → cost‑push inflation → margin pressure → slowdown
YoY ↓ → easing cost pressure → stabilisation Why: Useful for early inflation signals but not a primary cycle driver.

9. UK.RPI — Retail Price Index

Direction:

YoY ↑ → inflationary pressure → policy tightening
YoY ↓ → disinflation Why: Similar to CPI but less used for policy; still relevant for real income dynamics.

10. UK.ERI — Exchange Rate Index

Direction:

YoY ↑ (stronger GBP) → export drag → slowdown
YoY ↓ (weaker GBP) → export boost → support Why: Sterling cycles matter, but effects are smaller than domestic credit/housing.

⭐ Third Tier (Lagging or structural)

11. UK.UNEM — Unemployment %

Direction:

YoY ↑ → recession confirmation
YoY ↓ → expansion Why: Very lagging. Useful for confirming downturns, not forecasting them.

12. UK.GDPR / UK.GDP — GDP (Real & Nominal)

Direction:

YoY ↓ → confirms slowdown
YoY ↑ → confirms expansion Why: GDP is the definition of the cycle but is lagging and revised heavily.

13. UK.BOT — Balance of Trade

Direction:

YoY ↓ (worsening) → external drag
YoY ↑ (improving) → external support Why: Useful but noisy; not a primary cycle signal.

14. UK.GEXP — Government Expenditure

Direction:

YoY ↑ → fiscal support
YoY ↓ → fiscal drag Why: Policy‑driven, not a natural cycle indicator.

15. UK.GD%, UK.GD, UK.GCR — Public Debt & Cash Requirement

Direction:

YoY ↑ → fiscal stress
YoY ↓ → consolidation Why: Structural, not cyclical. Moves slowly.

16. UK.POP — Population

Direction:

YoY changes are tiny Why: Purely structural; irrelevant for cycle timing.

🇪🇺 Euro Area (Ranked)

Ticker	Name	Rank	Direction	Explanation
EU.CPI	Consumer Price Index (Harmonised)	1	“YoY ↑ overheating / YoY ↓ disinflation”	“Primary driver of ECB policy; inflation cycles lead monetary stance and future activity”
EU.INTT	ECB Interest Rate	2	“YoY ↑ tightening / YoY ↓ easing”	“Policy stance leads credit	lending
EU.UNEM	Unemployment %	3	“YoY ↑ recession confirmation / YoY ↓ expansion”	“Lagging indicator; confirms downturns but does not forecast them”
EU.GDP	Gross Domestic Product	4	“YoY ↑ expansion / YoY ↓ slowdown”	“Highly lagging and revised; useful for confirmation	not forecasting”

🇯🇵 Japan (Ranked)

Ticker	Name	Rank	Direction	Explanation
JP.CPI	Consumer Price Index	1	“YoY ↑ overheating / YoY ↓ disinflation”	“Key driver of Bank of Japan policy; inflation cycles lead monetary stance and future activity”
JP.GDP	Gross Domestic Product	2	“YoY ↑ expansion / YoY ↓ slowdown”	“Lagging but essential for confirming the business cycle; revisions common”
JP.POP	Population	3	“Minimal YoY movement”	“Structural demographic trend; not useful for cycle timing”

🇨🇳 China (Ranked)

Ticker	Name	Rank	Direction	Explanation
CN.CPI	Consumer Price Index	1	“YoY ↑ overheating / YoY ↓ disinflation”	“Primary driver of PBoC policy stance; inflation cycles lead credit and activity”
CN.INTT	Interest Rate (target)	2	“YoY ↑ tightening / YoY ↓ easing”	“Policy stance leads credit
CN.RPI	Retail Price Index	3	“YoY ↑ consumer inflation / YoY ↓ easing pressure”	“Useful for domestic demand and price‑pressure trends; secondary to CPI”
CN.POP	Population	4	“Minimal YoY movement”	“Structural demographic trend; not useful for cycle timing”