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Weekly High Frequency Indicators: Will Explosive Growth In 2021 Hit A Wall In 2022?

New Deal Democrat profile picture
New Deal Democrat


  • High frequency indicators can give us a nearly up-to-the-moment view of the economy.
  • The metrics are divided into long leading, short leading, and coincident indicators.
  • The nowcast and the short term forecast for most of 2021 are "extremely" positive.
  • But higher interest rates, plus explosive commodity and asset price growth, are becoming worrisome for 2022.


I look at the high frequency weekly indicators because while they can be very noisy, they provide a good nowcast of the economy, and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. They are also an excellent way to "mark your beliefs to market." In general, I go in order of long leading indicators, then short leading indicators, then coincident indicators.

A Note on Methodology

Data is presented in a "just the facts, ma'am" format with a minimum of commentary so that bias is minimized.

Where relevant, I include 12-month highs and lows in the data in parentheses to the right. All data taken from St. Louis FRED unless otherwise linked.

A few items (e.g., Financial Conditions indexes, regional Fed indexes, stock prices, the yield curve) have their own metrics based on long-term studies of their behavior.

Where data is seasonally adjusted, generally it is scored positively if it is within the top 1/3 of that range, negative in the bottom 1/3, and neutral in between. Where it is not seasonally adjusted, and there are seasonal issues, waiting for the YoY change to change sign will lag the turning point. Thus I make use of a convention: data is scored neutral if it is less than 1/2 as positive/negative as at its 12-month extreme.

With long leading indicators, which by definition turn at least 12 months before a turning point in the economy as a whole, there is an additional rule: data is automatically negative if, during an expansion, it has not made a new peak in the past year, with the sole exception that it is scored neutral if it is moving in the right direction and is close to making a new high.

For all series where a

This article was written by

New Deal Democrat profile picture
New Deal democrat As a professional who started an individual investor for almost 30 yeas ago, I quickly focused on economic cycles and the order in which they typically proceed. I have been writing about the economy for nearly 15 of those years, developing several alternate systems that include mid-cycle, long leading, short leading, coincident, lagging and long lagging indicators. I also focus particularly on their effects on average working and middle class Americans.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (6)

Housing constraints are the only real worry and supply side constraint that will feed into inflation. Upside is in latest jobs report where over a surprising 100,000 construction jobs were had. That will help remove a major supply side constraint of available trade labor that is crucial input to relieving the supply side bottlenecks to date.

Oil is undergoing a secular supply glut. Saudis and shale both are cooperating to serve their own respective self-interests. For the moment. That spigot could be turned on to max at any time, relieving any cost-push supply price shocks that may build up in the system over time, as history strongly suggests.

Higher interest rates will only mount if inflation rears its head. With amzn effect in full effect and supply side constraints only hopefully getting better over time, 2022 is certainly too early to call at this point, at best.
New Deal Democrat profile picture
@Ted Hu You write“2022 is certainly too early to call at this point, at best,” and it is certainly true that the die is not cast.

But forecasting 1+ year out based on the long leading indicators is something I have been doing with general success for the past 10 years, and with total transparency. For example, all through the 2nd half of last year I was writing in the conclusions to this very column that 2021 was going to feature strong growth if the pandemic could be brought under control.

If you doubt me, feel free to bookmark a few of my conclusions and see what they look like 6 or 9 months down the road.

Best regards, NDD
All that matters is the increase of the rate of money printing. There is no real economy anymore, yes people work, businesses survive and fail, but GROWTH is a function of how much debt we create.

Luckily, that won’t stop ever, lol.
@AbolishtheFed money is nothing without consumer confidence to spend it. Note GFC with limitless money printed. In the first year, there were no takers as animal spirits were in hiding and cars were loaded up in dealer lots with no takers.

What is secular tailwind for America is demographics and the family formation that arise from it. Zero percent debt with no inflation thanks to Amazon effect, means it’s all a function of demographic economic growth. 

Other countries, like China to Europe, aren’t so lucky, experiencing anemic systemic depopulation to boot.
@Ted Hu I agree, but consumer confidence is easily changed by announcing a few extra handouts and it trickles up.

Look at $600, that don’t mean anything to anyone, but it gets spent as fast as it comes in and then trickles up, extend unemployment, trickle up...

Inflation is sneaky. We are inundated by lousy products. My mothers clothes washing machine lasted 30 years and was easily fixable. Now they last about a third of that and it costs more to replace a board than replace the machine. This is even more so when looking at refrigerators. Cars are disposable after 10 years. This is all inflation that is not counted.

Where would this country be without government debt growing at an exponential rate. Our debt to GDP ratio is now over 1:1, before Obama it was 60%.

Europe and China are different than us. Nobody else is running twin deficits like we are.
Analytical Investors profile picture

Good comment on sneaky inflation. Downgraded food quality, and marketing us to eat more, is another form of sneaky inflation resulting in higher food costs (as a total) and higher downstream medical costs. I also see inflation in cost of phone calls, entertainment (with the some exceptions like Youtube music and movies), and computer software (through user fees). Overall, I think the biggest inflator is around fashion and consumerism, where the population is more than ever besotted on the latest expensive fashion.

However, I think cars are more reliable; I can easily run a new car 130,000 miles without a problem. There has also been deflation in cost of books, learning (online, not college), computer power (and need to replace; I used to replace every 2 years, now it's about every 7 years), tools (from China, unfortunately), and finally availability of almost everything for next to nothing at thrift stores (a consequence of the inflation of fashion and consumerism).

If you want to live cheaply you really can through a little planning and self discipline.
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