CFS Divisia M4 has proven to be a strong leading indicator of GDP growth. It also provides the most comprehensive real time assessment of the US financial system.
This morning’s downward revision of Q4 GDP data from 3.2% to 2.4% should come as no surprise. The pace of the economy also demonstrated a slowdown from a 4.1% saar expansion in Q3.
On the heels of the September CFS monetary release, we wrote Soft Spot for Financial Institutions and Economy – October 16, 2013.
The weather was clearly not the predominant story in Q4.
Based on our latest data, the economy will likely continue to soften (see CFS Monetary & Financial Data Release, February 19, 2014 or End of the Free QE Lunch, February 19, 2014 – available on request)