After reading a large amount of data, there appear to be two economic issues domestically that are indicators of the slowdown.
1.) Manufacturing. We're seeing one month slowdown readings from a variety of regional Fed indexes. We've seen weaker readings from Dallas, Richmond and Kansas City. This month, we've seen drops in Philadelphia and New York's readings. These readings are confirmed by the latest industrial production number from the Federal Reserve, which took a big hit from auto production decreases caused by Japan's earthquake.
2.) Initial unemployment claims: these spiked to very uncomfortable levels over the last few weeks, but have since dropped back to just over 400,000. We've heard continually that the increase was caused by one-time, seasonal factors. The latest drop adds some credibility to these thesis, but we're still not out of the woods.
I mention these points, because the latest leading indicators dropped by .3, with the drop caused by lower readings from a majority of the sectors.
Right now the incoming date continues to be mixed; the caution flag is still waving.
