Surprise indices suggest poor growth

Citi US surprise index 

Citi EU surprise index 

Citi EM surprise index

The economic surprise indices provide a good measure of whether the markets have made good forecasts on the economy and whether current information is potentially discounted in the markets. Markets will react to surprises and if there is more bad news surprises on the fundamentals, the markets should decline.

If actual data on the economy is coming in higher than expected, then the surprise index will rise. If growth is coming in slower than what was expected, the index will move lower. The data includes all fundamental information that is related to growth. There are many flaws with this type of approach but he produces a good raw estimate on the direction of the economy. The US, which is rich in economic data, will usually be more volatile than other markets. 

The US surprise index from Citi shows growth declines since peaking early in the year. The same pattern albeit more muted also applies to the EU. Emerging market surprise data has taken a nose-dive, but has now stabilized. The general tone is that analysts have not fully discounted the slowness in the global economy.