The recent stretch of dire economic data from Germany is starting to bear an unfortunate resemblance to late 2008 – when Lehman Brothers collapsed and the world tipped into the worst recession since the Great Depression.
On a severity scale, a downturn now will probably be nowhere close to the first quarter of 2009 when Germany’s gross domestic product shrank 4.5 percent on the quarter.
Still, Europe’s biggest economy is careening toward a technical recession unless it’s halted by a miraculous upturn in the September data.
An analysis of Reuters polls shows several of four key German economic indicators have come below the Reuters consensus over the past three months, in some cases below even the most pessimistic prediction.
When data start to get this volatile, they sometimes herald a change in the economic cycle. And it’s not always for the better.