Most media reporting on the global economy is negative and usually tells only what has happened so far.

But, there are several economic indicators which lead the economy, that is, indicate where things are going.   Here are five that are easy to find and watch.

1. Purchasing Managers Index (PMI)

A manufacturing measure of most countries, taking into account inventory, new orders, production, supplier deliveries, and employment.   Over 50 is an expanding sector.   This is usually published around the end of the month.   These have been generally going up since late 2012.

2. US Wage Growth

The US sharemarket has a huge impact on global markets.   The market is around record highs but unemployment is still high, so the US Fed has continued to stimulate the economy (and fueled share and property speculation).   If wage growth picks up, the Fed may tighten which may slow improving conditions (the Fed is reducing stimulus now but not as a result of wages growth).

3. European Bond Yields

The spread (difference in rates offered) on different government bonds has narrowed, which means investors are less worried about problem countries like Spain and Italy, etc.   If the spread widens, investors are becoming nervous and interest rates and exchange rates may be going up.

4. China

Most of the world wants China to grow, but high growth means inflation so authorities will then increase interest rates and cut spending to cool things down.   The Chinese economic plan is for steady growth, not a runaway economy.

5. Australia

Interest rates are at record lows, which has boosted property.   The mining infrastructure boom needs to be superseded by improving housing construction and then flowing on to stronger consumer spending.   Watch measures of consumer confidence eg., banks, and retail sales.