Leading Economic Index Improves in February
"The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.7 percent in February to 95.5 (2004 = 100), following a 0.2 percent increase in January and a 0.5 percent increase in December (see chart above)."
Said Ataman Ozyildirim, economist at The Conference Board: “Continued broad-based gains in the LEI for the United States confirm a more positive outlook for general economic activity in the first half of 2012, although still subdued consumer expectations and the purchasing managers’ index for new orders held the LEI back in February. The Coincident Economic Index for the United States, a measure of current economic conditions, has also been rising as employment, income, and sales data all continue to improve. Industrial production, however, has not yet picked up strongly.”
Meanwhile, the ECRI is still maintaining its recession call.
Said Ataman Ozyildirim, economist at The Conference Board: “Continued broad-based gains in the LEI for the United States confirm a more positive outlook for general economic activity in the first half of 2012, although still subdued consumer expectations and the purchasing managers’ index for new orders held the LEI back in February. The Coincident Economic Index for the United States, a measure of current economic conditions, has also been rising as employment, income, and sales data all continue to improve. Industrial production, however, has not yet picked up strongly.”
Meanwhile, the ECRI is still maintaining its recession call.
2 Comments:
the reason you may want to bet with the erci on this can be found on page 6 of the LEI technical notes.
http://www.conference-board.org/pdf_free/press/TechnicalPDF_4436_1332403559.pdf
the new orders index has been negative in 5 of the last 6 months.
the index was 93.7 in august and is 95.5 now.
that's a gain of 1.8.
looking at what drove that, 1.07 came from interest rate spread. that's a purely fed driven number. with this sort of manipulation going on, it is cargo cult thinking to presume the rate spread is telling us about the economy.
another .5 comes from stocks which are also being driven predominantly by a vast monetary expansion and inflation as opposed to real growth.
thus, pretty much all the change in the indicator comes from printing money just as pretty much all the reported real gdp growth for the last 2 q's has come from using a gdp delflator drastically lower than cpi.
From the Conference Board:
"LEADING INDICATORS. Eight of the ten indicators that make up The Conference Board LEI for the U.S. increased in February."
That looks like good news to me. Hopefully new orders pick up in March as inventories dwindle.
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