Because the signal of water pump bearing is seriously disturbed by noise and the fault evolution is complex, it is difficult to describe the performance degradation trend of water pump bearing in a timely and accurate manner using the traditional performance degradation index (PDI). In this paper, a new Cluster Migration Distance (CMD) algorithm is proposed. The extraction of the indicator includes the following four steps: First, the relevant blind separation is used to extract the useful signal of the monitored bearing from the mixed signal; secondly, the impact component is further enhanced by wavelet packet analysis. Then, the redundancy of the original feature vectors is eliminated using our previously proposed KJADE (Kernel Joint Approximate Diagonalization of Eigen-matrices) method. Finally, the newly proposed CMD index is computed as PDI. By calculating the offset trajectory of the feature cluster centroid in the continuous running process of the bearing, CMD can aptly deal with the complex and variable features in the fault evolution process of the water pump bearing. The whole-life monitoring data of a 220 KW water pump system are processed. The results show that the proposed CMD index has better early-warning ability and monotonicity than the traditional kurtosis index.