The magical indicator for predicting the economy: Garbage truck transportation data

As the saying goes, "a person's trash is another person's treasure." Similarly, the rubbish we make may be a magical indicator of the economic forecast.

Torsten Slok, the chief international economist at Deutsche Bank, used rubbish as a magical tool for predicting the economy. He consulted with the American Railway Association on the statistics of railway freight junk and used rubbish data to check the economy. Status, and the rubbish data as a supplement to other traditional economic indicators.

Sloan said on CNBC's "TrADIng Nation" program on Monday: "Because of the drop in oil prices and the appreciation of the US dollar, many economic statistics have been distorted and you have seen economic slowdown in many places. This indicator (garbage data ) Try to observe the position of the business cycle in a more pure perspective."

At this point, the garbage truck transportation data "effectively shows that the economy is continuing to recover, or that economic expansion is advancing."

Slok is not the first person to be aware of the link between garbage truck capacity and GDP growth. Michael McDough, an economist at Bloomberg, has tracked the growth of garbage truck load indicators for many years.

The close relationship between garbage and GDP growth

Admittedly, this data series has shown the close relationship between waste and GDP growth. Intuition also tells people that consumption, construction, and other similar activities often generate waste.

Although it may seem strange to discuss in depth the economic role of "junk", Slok said: "To rule out jests, when we measure economic activity from an angle that is completely different from the past, we are actually trying to understand what economic activity is.

The rubbish data confirms the results shown by the economic data, but “if anything else, it also points out that there are still some upside risks to the economic outlook at this time.”

In some traditional statistics, Tuesday’s ISM data showed that the US’s manufacturing sector expanded in October; the October employment report will be released this Friday.

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