The Conference Board Leading Economic Index® (LEI) for the US increased by 0.1 percent in July to 109.8 after a decline of 0.3 percent in June indicating that whilst the economy is still expanding, albeit slowly, the LEI has in essence been flat-lining since March 2010.
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| From The Economystic Times |
Yet again we get the no recession line
“The indicators point to a slow expansion through the end of the year,” says Ken Goldstein, economist at The Conference Board. “With inventory rebuilding moderating, the industrial core of the economy has moved to a slower pace. There appears to be no change in the pace of the service sector. Combined, the result is a weak economy with little forward momentum. However, the good news is that the data do not point to a recession.”
Personally I think that the more we see slowing in the economic indicators, be they employment numbers, leading economic indicators, retail sales figures or Manufacturing data, the more likely we'll see another recession. Looking at the LEI on the above graph it's not to hard to see that given another three or four months of flat or declining numbers, the point we're looking at now may well be the top.
The ten components that make up The Conference Board Leading Economic Index®
- Average weekly hours, manufacturing
- Average weekly initial claims for unemployment insurance
- Manufacturers’ new orders, consumer goods and materials
- Index of supplier deliveries – vendor performance
- Manufacturers' new orders, nondefense capital goods
- Building permits, new private housing units
- Stock prices, 500 common stocks
- Money supply, M2
- Interest rate spread, 10-year Treasury bonds less federal funds
- Index of consumer expectations
Read the full News release here
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