With a federal holiday yesterday and nothing on the docket today, our Economic Monitors are unusually light the first half of this week. While there is nothing that would have an impact so far this week, the Citi Economic Surprise Index for the US is reaching the lowest levels since May of last year, shortly after the index hit record lows as economic data saw drastic impacts from the onset of COVID. These surprise indices represent how economic data is coming in relative to expectations. Lower/negative readings indicate economic data is coming in worse than expected and vice versa for higher readings.
Last year saw record lows in the index which were followed by record highs that far surpassed any level with historical precedence. Since the peak in July 2020, the Surprise index has not only moderated but turned negative. The US is now at the lowest level in over a year and in the eighth percentile of its historical range. While it has yet to find a bottom, this negative of a reading won’t last forever. The economists providing estimates will eventually catch up to the downside, and they usually overshoot, which will allow for the surprise index to bottom and start heading higher again. Click here to view Bespoke’s premium membership options.