The very same data that foretold the end of the freefall back in April when it first turned positive, and economic expansion thereafter, looks like it will continue its ascent albeit more gradually in October. Here's my best estimate of how the 10 leading economic indicators appear to have performed in the last month:
The yield curve is still positive +0.25
Jobless claims were strongly better +0.1
Aggregate hours in manufacturing were up 1/10 of an hour +0.07
Stocks' 3 month gain is worth +0.05
Durable goods' strong growth add +0.05
Consumer nondurables up significantly +0.05
New home sales were flat 0.0
ISM deliveries down slightly, subtracting -0.05
Consumer sentiment was down -0.1
Real M2* has been trending slightly negative, so -0.1
Bottom line: it looks like October Leading Economic Indicators (and revisions to September) will net about +0.3, the seventh positive reading in a row. This suggests that economic growth will continue through this quarter and the first quarter of 2010 as well.
Typically, even in the last two "jobless recoveries", jobs began to be added to the economy when the YoY LEI was up +5% or better. This month will replace the awful -1% of October 2008, meaning that for the last 7 months, the LEI will probably be up 5.9%. YoY they will be up about 4.2%. If the LEI simply print flat for November and December, the YoY growth will be +5.0 %, consistent with jobs being added in December or January.