Friday, May 21, 2010

Following A Record 12-Mo. Increase of 11.5 Points, Leading Index Falls One-Tenth of One Point in April

Following 12 consecutive monthly increases from April 2009 to March 2010 in the Leading Economic Index, which was: a) the first such string of 12 straight increases in six years (since 2004), and b) the largest 12-month increase (11.5 points) in the history of the Leading Economic Index (back to 1959), the index slipped in April to 109.3 from 109.4 in March, according to the Conference Board report yesterday.  

That means that there was a statistically insignifcant drop of one-tenth of 1 point in April's Leading Economic Index, hardly the kind of decline that should cause any concerns about the future direction of the U.S. economy.  And yet according to the headlines, the economic recovery is about to be derailed:

"Key US indicators point to economic recovery losing steam"

"Leading indicators drop, experts still expect “sluggish” economic growth"

"US Economy: Leading Index Signals Recovery to Cool"

"Uh oh: Leading economic indicators slip in April"

"US: Leading Index Dips; Slower Growth Ahead"

How about something more realistic like:

"Following A Record 12-Month Increase, Leading Index in April Falls By Insignificant One-Tenth of One Point: No Change Signalled in Economic Recovery"


At 5/21/2010 10:21 AM, Anonymous Anonymous said...

The economic recovery may indeed be derailed, if not by persistent unemployment undermining consumer confidence, then by the myriad of obstacles put in the way by an incompetent and corrupt Democrat led congress. Small businesses are still coming to grips with the prosperity destroying aspects of Obamacare, as evidenced by this article at the Weekly Standard:

Forget about open-heart surgery or cutting-edge cancer treatments. Under Obamacare, you might have a hard time finding a hamburger. A statement released by White Castle, the Ohio-based burger chain, highlights how damaging Obamacare would be to small businesses and to Americans' job prospects.

White Castle reports that a single provision of Obamacare would cut its net income in half -- and then some. Jamie Richardson, a White Castle executive, says, "We’ve been working on this internally from a number of different perspectives. One [provision] that has [us] the most concerned is the $3,000 penalty that kicks in when an employee’s portion of a premium exceeds 9.5% of Household Income." Richardson elaborates, "In present form, this provision alone would lead to approximate increased costs equal to over 55% of what we earn annually in net income (based on [our] past 4-year average). Effectively cutting our net income in half would have [a] devastating impact on the business -- cutting future expansion and more job creation at least in half. Sadly, it makes it difficult to justify growing where jobs are needed most -- in lower income areas." And that's all from just a single provision in a 2,700-page act.

The Obama administration's economic policy seems to involve dividing businesses into two categories: too big to fail, and too little to matter.

White Castle, Obamacare would cut our net income in half, Weekly Standard

Add to that the repeal of the Bush tax cuts, the increased taxes and energy costs of Cap-and-Trade and the potential for a VAT and you have a perfect recipe for economic decline.

At 5/21/2010 10:37 AM, Anonymous morganovich said...

how about "given recent stock market action, employment data, and building permits, the may indicator is set to show a second consecutive decline"

3 in a row are generally taken to mean an inflection point in the economy.

At 5/21/2010 11:26 AM, Blogger juandos said...

"Add to that the repeal of the Bush tax cuts, the increased taxes and energy costs of Cap-and-Trade and the potential for a VAT and you have a perfect recipe for economic decline"...

Consider the following anon...

From the Heritage Foundation blog site: Only VAT Can Fund Leftist Welfare State

At 5/21/2010 12:09 PM, Blogger Benjamin Cole said...

Don't forget the $1 trillion a year we pour down an economic rathole, in Department of Defense, VA and Homeland Security-civilian defense.

That's every year. Next year and the one after that.

$10 trillion in the next 10 years.

Somebody has to pay for it.

Federal military employees get pensions after 20 years of service. May live another 40 years--at taxpayer expense, including medical. Huge tail on outlays for federal military employees. Unlimited upside, when you consider medical bills.

We are bankrupting ourselves.

There is one way to fix the federal deficit--give back to every state roughly the same amount as they kick in.

States Rights. No more subsidizing weakling states.

At 5/21/2010 1:16 PM, Blogger juandos said...

Hey pseudo benny why do you post such silly and inane comments?

You whine about the defense department spending which is constitutional but you have narry a word to say about the socialist, nanny state programs that are at best constitutionally questionable and a damn site more expensive...

Are you some sort of closet commie?

At 5/21/2010 1:32 PM, Blogger Paul said...

"Don't forget the $1 trillion a year we pour down an economic rathole, in Department of Defense, VA and Homeland Security-civilian defense."

Some of it's wasted, but we do kill alot of terrorists with it. That's an excellent "bang" for the buck.

And yeah, what juandos said. I guess you figure you'll benefit from Obamacare.

At 5/21/2010 3:08 PM, Anonymous Anonymous said...

Here's where that $1 trillion figure comes from that Benny keeps bringing up.

It actually includes spending on interest, NASA, Department of State, Department of Energy, Department of the Treasury, and Department of Homeland Security.

A lot of that is wasted, but the fat isn't really there. We went from $3 trillion in total spending in 2008 to $3.8 trillion for 2010 through 2012. Then ramping up thereafter.

Want to save $1 trillion? Dont' spend the extra $800 billion in the first place is a good start.

At 5/21/2010 3:26 PM, Anonymous Anonymous said...

Oh forgot to link to the OMB charts. Some nice history and projections.

Pull up Table 4.1 for a nice break down and note which departments won the budget lottery. HHS, Education, Ag, and Labor. HHS on it's own is forecast to exceed $1 trillion by 2014. Treasury a close second I guess due to their control of the health care fines.

At 5/21/2010 3:31 PM, Anonymous grant said...

"federal military employees get pensions after 20 years of service"

Partial solutions:-
1.cut back the size of the military somewhat. could educate and train military personnel while they are enlisted in the forces so they are more employable when they end their military service.
3.extend the reenlistment age so they don't retire at a young age but stay in the services longer.

At 5/21/2010 5:55 PM, Anonymous Anonymous said...

Don't forget the $1 trillion a year we pour down an economic rathole, in Department of Defense, VA and Homeland Security-civilian defense.

Yeah, who needs a military, especially when the government has more important things to spend our tax dollars on - like using "stimulus" money to create jobs in China:

Despite all the talk of green jobs, the overwhelming majority of stimulus money spent on wind power has gone to foreign companies, according to a new report by the Investigative Reporting Workshop at the American University’s School of Communication in Washington, D.C.

Nearly $2 billion in money from the American Recovery and Reinvestment Act has been spent on wind power, funding the creation of enough new wind farms to power 2.4 million homes over the past year. But the study found that nearly 80 percent of that money has gone to foreign manufacturers of wind turbines.

ABC News

"Benny" is like "Rainman" without the intellect or charm. He just keeps repeating the same old leftist bromides over and over again, as if the act of repetition makes them somehow meaningful.

At 5/22/2010 10:32 AM, Blogger juandos said...

Note the following from the Calculated Risk blog site: States: Mortgage Delinquency Rate vs. Unemployment Rate


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