Today The Conference Board announced that the index of leading economic indicators increased 0.1 percent in May following a similar increase in April (http://www.conference-board.org/economics/bci/pressRelease_output.cfm?cid=1). These minor gains were insufficient to offset decreases in previous months, so that the index has declined over the past half year.
The index is an amalgam of ten statistical series, such as stock prices and building permits, designed to give an early indication of the economy’s direction. You can see from the chart below that the index has stalled. Today’s report maintains that impression.
Leading Indicators
(Click on chart to enlarge)
Recessions shaded
Here’s a short list, with sources, of leading indicators scheduled for publication next week. They will provide important clues regarding the economy’s direction.
Conf Bd*…………………….Consumer confidence…………Tue, 24th
Census**…………………….Capital goods…………………..Wed, 25th
Census**….……….…….…..New-home sales……..……….Wed, 25th
NAR***…………….…………Existing-home sales….…….Thurs, 26th
* Conf Bd = Conference Board
** Census = U.S. Bureau of the Census
*** NAR = National Association of Realtors
Consumer confidence and home sales have plunged over the past year and led the economy south. The economy can’t turn around until they stabilize. Business expenditures on (nondefense) capital goods have leveled off, but not plunged. Should they begin to fall, that would confirm the economy’s overall weakness. Should they resume their climb, that would indicate the economy’s weakness is confined to the consumer sector.
(The chart was taken from http://www.beyourowneconomist.com. [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of Economic Indicators.)
© 2008 Michael B. Lehmann
No comments:
Post a Comment