Friday, October 22, 2010

USA Monthly Leading Economic Index at New High in September (Chart) "Economy is slow, has no forward momentum"

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USA Economy: "Indicators Point to Slow Growth Through Early 2011"


USA Monthly Leading Economic Index +0.3% in August

Official Statement The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.3 percent in September to 110.4 (2004 = 100), following a 0.1 percent increase in August, and a 0.2 percent increase in July. Says Ataman Ozyildirim, economist at The Conference Board: “The LEI remains on a general upward trend, but it is growing at its slowest pace since the middle of 2009. There isn’t any indication of a relapse into another downturn through the end of the year.” Says Ken Goldstein, economist at The Conference Board: “More than a year after the recession officially ended, the economy is slow and has no forward momentum. The LEI suggests little change in economic conditions through the holidays or the early months of 2011.”

Cycle History The current LEI in August of 110.4 (preliminary) is at a cyclical high. The current LEI is up +12.5 and +12.8% from the cyclical bottom of 97.9 in March 2009.

Trend As noted by The Conference Board, the general trend is upwards, albeit slowly. The September LEI of 110.4 (preliminary) is above the 12-month moving average of 108.5. The 12-month moving average has been increasing, ascending, each month in 2010. The September LEI of 110.4 (preliminary) is also above the 24-month moving average of 104.3, which is also increasing. (The 12-month and 24-month moving averages are not shown on this page).

Monthly Leading Economic Index (Chart) Below is a chart of the latest 24 months (2 years) of The Conference Board LEI from October 2008 through the latest month reported, September 2010 (preliminary). As can be seen, the LEI bottomed in March 2009 and the Great Recession officially ended in June 2009. The LEI then began ascending to the current September 2010 peak, although the rate of increase has slowed. Concomitant with the slowing rate of increase in the LEI has been the USA GDP growth being revised downwards for the second half of 2010.



Commentary

The September LEI (preliminary) eked out yet another gain to set a cyclical high of 110.4, which is encouraging for the USA ecconomy. The LEI has come a long way from the March 2009 cyclical low of 97.9. Even as the rate of increase has slowed, as evidenced by the above chart, the LEI is still ascending whiich indicates a double-dip recession is not probable.



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The Conference Board (TCB)
*Data courtesy of The Conference Board*


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