click for ginormous chart

Source: Fusion Analytics

 

Take a look at the chart above — its the Month/over/month change in the Leading Economic Indicators.

We hold an occasional monthly conference call for FusionIQ subscribers, and this one came up last night.

To avoid whippy or false signals, we use a 4 Month Moving Average of the MoM% change (see red line) watching for a drop below the 0.0 to -0.5% band (gray band). That tends to only occur during pre-recessionary preiods.

The series is not only above the danger zone, but it is trending upwards — meaning that the odds of a recession are minimal.

 

 

LEI COMPONENTS:

1. Average weekly hours, manufacturing
2. Average weekly initial jobless claims
3. Manufacturing new orders, consumer goods and materials
4. ISM new orders, consumer
5. Manufacturers’ new orders, nondefense capital
6. Building permits, new private housing
7. Stock prices, 500 common stocks
8. Leading Credit
9. Interest rate
10.Average consumer expectations

Category: Data Analysis, Economy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

7 Responses to “Recession? No, According to Leading Economic Indicators (LEI)”

  1. jsmfr says:

    “Trending upward” in only the very shortest-term of time frames. Looks like a pretty convincing downtrend since the immediate post-recession spike up. Probably not a recession signal, but hardly pointing to economic strength either. Continued sluggish growth seems to be the message here.

    ~~~

    BR: You can even argue its trending upwards to the upper band of a down channel!

  2. Tacomaman says:

    It looks like the confirmed uptrend would have started in mid to late 2012. Prior to that I see lower highs and lower lows. By the way, the website design is much improved. Call it 4.9 stars. Ginormous chart? Looks more like a mini-ginormous one. Ha ha.

  3. Investradamus says:

    Would it be possible to see the section of that chart from approx 2003-2007 overlaid on top of 2009-2013? I apologize for the crude photoshop skills, but here’s an image of what I was hoping I might be able to see a little better:
    http://i.imgur.com/0nlfDJm.png

  4. Lugnut says:

    We’ll see how long $2TT of Fed slop in the large bank balance sheets will help keep the economy above the Maxon-Dixon line. Its certinaly helping the prop desks.

  5. TR says:

    Aren’t we looking at the end of the cycle?

  6. Wes Schott says:

    …lower lows, lower highs…