Summary of Goldman Sachs Economic Indicators Update Industry Overview - The report focuses on global economic indicators and financial conditions, particularly their expected impact on growth in 2026. Key Points Financial Conditions Index (FCI) - The Financial Conditions Index indicates a +0.2 percentage point (pp) impulse to G10 growth in 2026 on a GDP-weighted basis [2][4][12] - The Global ex Russia FCI eased by 9.9 basis points (bp) on short rates [7][12] Growth Forecasts - No changes were made to the 2025 growth forecasts last week [7][12] - The report includes a detailed breakdown of GDP forecast changes across various regions, with notable increases in Turkey (+1.2pp) and Taiwan (+1.1pp) [8][12] Current Activity Indicator (CAI) - The preliminary December CAI rose by +0.8pp in India and fell by -0.7pp in Japan [11][12] - The global CAI for December is reported at +2.5%, with developed markets at +1.3% and emerging markets at +3.9% [10][12] Wage and Price Inflation - The report includes wage trackers and inflation measures, indicating trends in wage growth across G10 economies [19][20][72] - The US wage tracker shows a composition-adjusted measure for 2020 and 2021 [18][20] Jobs-Workers Gap - The report highlights changes in the jobs-workers gap since December 2019, showing a significant gap in the US and UK [21][76] Fiscal Policy Impact - The effect of fiscal policy on real GDP growth is analyzed, with specific impacts noted for the US, Euro Area, and UK [80][85] - The US fiscal impulse captures both expansionary fiscal discretionary policy and the tax-like effects of tariffs [86][87] Short-Run Utilization Scores - The report provides short-run utilization scores for various countries, indicating the percentage of potential utilization in the labor market and industrial sector [88][93] Additional Insights - The report emphasizes the importance of financial conditions in shaping GDP growth outlooks and the transmission of monetary policy to the real economy [12][112] - It also discusses the methodology behind the indicators used, including the CAI and FCI, which are crucial for understanding economic trends [112][113] This summary encapsulates the critical insights from the Goldman Sachs Economic Indicators Update, focusing on financial conditions, growth forecasts, and economic indicators across various regions.

Summary of Goldman Sachs Economic Indicators Update Industry Overview - The report focuses on global economic indicators and forecasts, particularly for GDP growth in 2026 and adjustments in various regions and countries. Key Points Global Economic Growth - Goldman Sachs expects global real GDP growth of **2.8% in 2026**, which is above the Bloomberg consensus of **2.6%** [2][4][10] Financial Conditions Index (FCI) - The Global ex Russia FCI increased by **0.3 basis points** due to exchange rate changes [8][26] - The report includes detailed charts on the FCI levels and their weekly changes across various countries [31][36] Current Activity Indicator (CAI) - The Global CAI stands slightly above potential, indicating a positive growth signal [15][49] - December CAI values show: - Global: **+2.7%** - Developed Markets: **+1.5%** - US: **+1.8%** - Euro Area: **+1.0%** - Japan: **+0.8%** [12][53] Country-Specific Adjustments - Significant upgrades and downgrades in GDP forecasts for 2025: - Taiwan: **+2.8 percentage points** - Turkiye: **+1.2 percentage points** [10][104] - Changes in GDP forecasts for 2026 show a decline for Turkiye by **-0.8 percentage points** [105] Inflation Forecasts - Adjustments in inflation forecasts for 2025 and 2026 include: - Core Inflation for Argentina: **+1.4 percentage points** - Core Inflation for Turkiye: **+1.9 percentage points** [96][100] Labor Market Insights - The report discusses the jobs-workers gap, indicating labor demand versus supply across various countries, with notable changes since December 2019 [24][80] Fiscal Policy Impacts - The report analyzes the effect of fiscal policy on real GDP growth, with specific impacts noted for the US and Euro Area [84][88] Additional Insights - The report emphasizes the importance of financial conditions in predicting GDP growth and the transmission of monetary policy to the real economy [114] - It includes a methodology section detailing how various indicators are calculated and interpreted [113] This summary encapsulates the key findings and insights from the Goldman Sachs Economic Indicators Update, providing a comprehensive overview of the current economic landscape and forecasts.

Investment Rating - The report indicates an upgrade in GDP growth forecasts for China, suggesting a positive outlook for the region [4][5]. Core Insights - The report highlights that Goldman Sachs' forecasts for China's real GDP growth are now significantly above consensus for 2025 and 2026, driven by a manufacturing push [4][5]. - The Financial Conditions Index (FCI) has shown a slight increase, indicating a marginal improvement in financial conditions globally [9][30]. - The Current Activity Indicator (CAI) for China stands at +5.8% for September, reflecting strong economic activity [54]. Summary by Sections GDP Forecast Changes - The report details changes in GDP forecasts across various regions, with notable increases for Taiwan (+1.9 percentage points) and Turkey (+1.2 percentage points) [6][12][104]. - The global GDP forecast has been adjusted upwards, reflecting a more optimistic economic outlook [103][104]. Financial Conditions - The Global ex Russia FCI rose by +0.5 basis points over the week, indicating a slight easing of financial conditions [9][30]. - The report provides insights into the implications of financial conditions on real GDP growth, suggesting a positive correlation [45][46]. Current Activity Indicators - The CAI for developed markets is reported at +1.5% for October, while emerging markets show a stronger performance at +4.5% [54][56]. - The CAI for the US is +2.1%, indicating robust economic activity [54]. Wage and Price Inflation - Wage trackers indicate varying trends across different countries, with the US showing a composition-adjusted increase in wage growth [22][73]. - Inflation measures, including trimmed core inflation, are discussed, with implications for future monetary policy [68][69]. Fiscal Policy Impacts - The report analyzes the effects of fiscal policy on real GDP growth, with specific attention to the US and Euro Area [84][89]. - It highlights the expected fiscal impulses over the next four quarters, indicating potential growth drivers [87][88].

Investment Rating - The report indicates that the investment rating for the industry is positive, with forecasts for GDP growth in China significantly above consensus for 2025 and 2026 [4][5]. Core Insights - The report highlights an upward revision in GDP forecasts for China, driven by a strong manufacturing push, which is expected to enhance economic growth [5]. - The Global Financial Conditions Index (FCI) has shown a slight increase, indicating a more favorable financial environment for growth [9][32]. - Current Activity Indicators (CAI) for various regions, including China and India, reflect robust economic activity, with China reporting a CAI of +5.8% for September [54][56]. Summary by Sections GDP Forecast Changes - The report details changes in GDP forecasts for various regions, with notable increases for Taiwan (+1.9 percentage points) and Turkey (+1.2 percentage points) [6][12]. - The overall global GDP forecast has been adjusted positively, reflecting improved economic conditions across multiple countries [103][104]. Financial Conditions - The Global ex Russia FCI rose by +0.5 basis points over the week, suggesting a slight easing in financial conditions [9][32]. - The report provides insights into the implications of financial conditions on real GDP growth, indicating a positive correlation [45][46]. Current Activity Indicators - The CAI for the global economy stands at +2.7% for October, with developed markets at +1.5% and emerging markets at +4.5% [54][56]. - Specific countries like Spain and Australia show strong CAI values, indicating robust economic performance [54]. Wage and Price Inflation - Wage trackers indicate varying trends across different countries, with the US and Canada showing positive wage growth [73][75]. - The report discusses the impact of wage growth on inflation measures, highlighting the relationship between labor market conditions and price stability [21][22]. Fiscal Policy Impacts - The report analyzes the effects of fiscal policy on real GDP growth, with projections indicating a positive impact from expansionary fiscal measures in the US and other regions [84][89]. - It emphasizes the importance of fiscal impulses in shaping economic growth trajectories [87][90].

Summary of Key Points from Goldman Sachs Economic Indicators Update Industry Overview - The report focuses on global economic indicators, particularly in developed markets (DMs) and emerging markets (EMs) [1][3][4]. Core Insights and Arguments - **Current Activity Indicators (CAIs)**: The CAIs for major developed markets remain below potential, indicating subdued economic activity. For instance, the global CAI was reported at +1.9% in June, while developed markets showed a CAI of +0.5% [14][51]. - **Growth Forecasts**: The GDP growth forecast for 2025 has been adjusted, with notable increases in Malaysia and China. The report highlights a decrease in growth expectations for several countries, including the US and Euro Area [12][99]. - **Financial Conditions Index (FCI)**: The FCI has tightened primarily due to rising interest rates, impacting growth prospects across various regions [9][31]. - **Wage and Price Inflation**: The report includes insights on wage trackers and inflation measures, indicating ongoing inflationary pressures in the labor market [20][22]. Important but Potentially Overlooked Content - **Country-Specific Data**: The report provides detailed CAI data for individual countries, showing significant variations. For example, India had a CAI of +6.8% in June, while the UK reported -1.3% [14][51]. - **Utilization Scores**: Short-run utilization scores indicate how much of the potential output is being utilized in various economies, with the US showing a score of -1.8% in July [87]. - **Fiscal Impulses**: The report discusses the effect of fiscal policy on GDP growth, with specific projections for the next four quarters across different regions [80][82]. Conclusion - The Goldman Sachs report provides a comprehensive overview of current economic conditions, highlighting the challenges faced by developed markets while noting potential growth in emerging markets. The data suggests a cautious outlook for global economic activity, influenced by tightening financial conditions and inflationary pressures.

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The GS Financial Conditions Index (FCI) indicates a tightening of financial conditions globally, primarily driven by equity market selloffs due to tariff impacts, contributing 47 basis points to the tightening in the US FCI last week [2][4] - The global economic outlook shows a decrease in GDP growth forecasts for 2025, particularly in Asia and North America, with notable reductions in several countries [10][96] - The Current Activity Indicator (CAI) for March shows a global value of +2.1%, with emerging markets performing better than developed markets [51] Summary by Sections Financial Conditions Index (FCI) - The FCI is designed to assess the overall financial conditions across major economies, providing insights into GDP growth outlook and monetary policy transmission [4] - Recent data shows a tightening in the Global ex Russia FCI, primarily due to equity market performance [8] - The US FCI experienced a significant tightening, with contributions from long rates, short rates, credit spreads, and equities [32][33] GDP Forecast Changes - The report highlights a downward revision in GDP growth forecasts for 2025 across various regions, with North America and Asia Pacific seeing the most significant declines [10][96] - Specific countries like Argentina and Turkey have shown notable changes in their GDP forecasts, with Argentina's forecast increasing by 1.0 percentage points [96][97] Current Activity Indicator (CAI) - The CAI for March indicates a global increase, with emerging markets showing stronger performance compared to developed markets [51] - The CAI values for specific countries reveal varied economic activity, with Spain at +3.6% and Brazil at +0.5% [51] Wage and Price Inflation - The report includes wage trackers and inflation measures, indicating trends in wage growth across different regions [21][68] - The wage growth in the US and other developed markets is being closely monitored as it impacts inflation expectations [21][68] Fiscal Impulses - The report discusses the effects of fiscal policy on real GDP growth, indicating varying impacts across different regions, with the US and Euro Area showing significant fiscal impulses [82][83] Output Gaps - The report provides insights into short-run utilization scores across various countries, indicating how much of their potential output is being utilized [88][89]