US Growth Momentum Index (UGMI)

US Growth Momentum Index (UGMI) is a macroeconomic indicator designed to reflect the current economic health of the United States. The index combines four key economic factors—Industrial Production (INDPRO), Retail Sales (RSAFS), Unemployment Rate (UNRATE), and the 10Y-2Y Yield Curve Spread—and aggregates them into a single line representing overall growth momentum.

The UGMI is based on Z-Score calculations for each of these components, helping to identify whether the U.S. economy is in an expansionary growth phase or a contractionary recession phase.

How to Read the UGMI:
Core Growth Line (Blue): This is the main line representing the aggregated growth momentum. It is calculated using the Z-scores of the key economic indicators.

0 Line: The 0 line represents the neutral zone. If the UGMI is above the 0 line, it suggests that the economy is expanding. Below the 0 line indicates contraction or a potential recession.

Zones Above 1: When the UGMI is above 1, it represents a strong expansionary phase or boom, possibly signaling the top of a bull market or local peak.

Zones Below -1: When the UGMI falls below -1, it indicates a severe recession or significant contraction in the economy.

Color Coding:
Green: When the UGMI is above the 1 line, the background turns green, indicating a strong growth phase.

Red: When the UGMI is below -1, the background turns red, representing a recession or significant economic downturn.

This indicator helps traders and investors to understand whether the economy is growing or contracting, and is especially useful for identifying potential market tops or turning points.