For G7 countries the GPS (the green line in the charts below) shows where the 12-month consensus GDP forecast may stand in three months’ time for each economy. The blue line shows the current 12-month economic consensus forecast for each economy, based on forecasts reported by Consensus Economics. The nowcast (orange line) shows the GDP forecast based on our composite of traditional macroeconomic indicators. With the China GPS, we create a similar gauge of the three-month growth horizon but focus on the Caixin/Markit composite PMI because China’s official GDP target guides such forecasts and makes them less reflective of investor views on the economic outlook. Click the country flags to toggle between the nine countries we track. Click inside the charts to zero in on any time period.
The GPS builds on existing nowcasting models that exploit the information from dozens of macroeconomic indicators to forecast GDP growth – including realized activity, employment, sentiment and survey data. It draws on a wider set of information sources by incorporating proprietary big data insights from BlackRock’s Scientific Active Equity team. These include micro insights, such as consumer behavior captured through internet searches, and macro insights such as country business sentiment measured through the text-mining of corporate managers’ conference calls. Other big data inputs include online job postings, inflation chatter, satellite images, e-invoicing and traffic patterns.
The BlackRock GPS was developed by BlackRock Investment Institute and Scientific Active Equity. For full details, see Introducing the BlackRock GPS.