- by New Deal democrat
The final August University of Michigan index of consumer sentiment was reported this morning. It had been causing me concern as during July and earlier this month, both the current conditions and the future expectations components were decreasing. The expectations component is a Leading Economic Indicator, and was the only such indicator decreasing. Added to job declines and wage stagnation, and there was great cause for concern.
Not only did the overall index improve from 63.2 earlier this month to 65.7 (but still below July's 66.0 and June's 70.8), but the expectations index, which was 62.1 earlier this month, improved to 65.0, exceeding July's 63.2 reading (although still below May's high of 69.4).
Not perfect, but back on the right track. This means that it will make a positive contribution to August's tally of LEI's, which look on track for another strong month -- the fifth in a row.
Tuesday Watch
32 minutes ago
6 comments:
Of possible interest?
Report that agriculture banks may be the next big bust:
http://cornandsoybeandigest.com/davidkohl/0818-FDIC-ag-bank-crisis/
That you can squeeze optimism out of these noise-level changes confirms your hopeless chartist bias. Chartism, which has been repeatedly debunked by mainstream economists and securities analysts, is at the core of your voodoo-like faith in the predictive power of graph squiggles.
I am sick to death of progressively lower economic numbers being called "improvements" because the lower number is slightly higher than an even lower estimate. This is an absurd exercise in forced optimism.
Anonymous 11:22a.m.:
You are confusing "technical analysis" of markets (as opposed to "fundamental analysis") vs. reading economic data.
The leading economic indicators do, in fact, lead. There is half a century of data in support of that proposition. While the change in consumer expectations in late August alone is certainly "noise level", when it falls in line with what is happening with virtually every other leading indicator for the last few months, that's an unmistakable trend.
If we get a positive GDP print for 3Q2009, how is that going to fit with gloom-n-doom "fundamental analysis"? Or will that be just more data to pretend isn't there?
Chartism, which has been repeatedly debunked by mainstream economists and securities analysts, is at the core of your voodoo-like faith in the predictive power of graph squiggles.
Because economists would never use a chart to convey information. Please reconsider any wish to procreate.
If we get a positive GDP print for 3Q2009, how is that going to fit with gloom-n-doom "fundamental analysis"? Or will that be just more data to pretend isn't there?
It will likely be a bump in the W-shaped recession Roubini and others consider a highly possible outcome. But NDD and Bonddad will declare victory on any return to growth. America can't return to prosperity when soaring government spending is used to hide and sustain the gross corruption of our financial institutions. AIG is now the metaphor for America, and its stock is soaring like Wile E. Coyote flying off a cliff.
Soaring government spending is in fact the standard Keynsian approach to a recession. See Krugman's latest column.
A positive GDP print is required for things to get better -- especially employment. Unless you're one of the idiots who thinks that unemployment isn't a lagging indicator?
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