Sunday, August 29, 2010

USA Monthly Leading Economic Index: Double Dip Recession or Bottom Bouncing? (Chart)

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Is the USA Economy Bottom Bouncing?


Monthly Leading Economic Index: Double Dip Recession or Bottom Bouncing?

This is the third post of a three part series reviewing the overall USA economy and what the economic trend might be: 1) a  rebound upwards with continued growth, 2) a dip into another recession, or 3) a stagnant, bottom bouncing near zero growth economy. First, the USA quarterly GDP was reviewed and charted and a downward trend noted. Second, the ECRI Weekly Leading Index was reviewed and charted and a bottom bouncing trend was noted. Third, below, the TCB Monthly Leading Economic Index is reviewed and a leveling off, perhaps topping out is noted.

Three time frames have been reviewed: the BEA quarterly GDP, the TCB monthly Leading Economic Index, and the ECRI Weekly Leading Index.

Below is a chart of the latest 24 months of The Conference Board monthly Leading Economic Index, from August 2008 through the latest month reported, July 2010. As can be seen, the LEI bottomed in March 2009 (same as USA stock market), ascended significantly through May 2010, and now has leveled off, perhaps even peaking. Concomitant with this LEI peaking action has been the quarterly GDP growth slowing, as reviewed and charted here, in a previous post, "USA Q2 GDP Revised Downward to 1.6% (Chart)". As with the declining 2010 Q2 GDP of +1.6%, the LEI does appear to be at a crossroads: a continuing upwards trend and renewed GDP growth, continued leveling off, or a  topping out and decline with GDP following downwards?

The 24-month moving average of the LEI is 103.5, which the July value of 109.8 (preliminary) is well above and has not been below since August 2009. The 12-month moving average of the LEI is 107.3, which the LEI has not been below since December 2009. The LEI is showing continued strength.


USA Economy: Double Dip Recession or Bottom Bounce?




Data courtesy of The Conference Board


Links
USA Economic Weekly Leading Index: Double Dip Recession or Bottom Bouncing? (Chart) BoomDoomEconomy
USA Q2 GDP Revised Downward to 1.6% (Chart) BoomDoomEconomy
S&P 500: Another Death Cross Arrives (Charts) MatrixMarkets
Full Recovery Could Take Decade or More: Economist CNBC
Morici: Trade Deficit Causes Jobless Recovery CNBC
The Conference Board TCB


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