- by New Deal democrat
My Weekly Indicators post is up at Seeking Alpha.
The coincident data continues quite strong, and the long leading indicators are increasingly “less bad,” which is something that happens when recessions are beginning to ebb.
As usual, clicking over and reading will bring you up to the virtual moment as to the economy, and bring me a little bit of Holiday Cheer.
While I am at it, as noted on Friday, let me make a couple of comments about the latest ISM manufacturing report. I’m going to discuss construction spending separately in a day or two.
While both the headline and new orders numbers continued to show contraction, at 46.7 and 48.3, respectively, note that the trend in new orders in particular over the past few months is slight improvement:
The bottom line of which is, if there was no recession when the new orders index was coming in at levels under 45 earlier this year, it is unlikely that there is one now. Partly this is because the ISM survey is a diffusion index (i.e., unweighted), and so it has not been showing the relative strength in the important motor vehicle and parts manufacturing sector; and partly it is that manufacturing in the US is less a proportion of GDP than it was in the second half of the 20th century - so it takes a bigger decline to make a similar impact.
If the Fed-induced downturn in credit conditions and loan applications spreads out further into the economy, it is going to take an actual downturn in ongoing construction (of which there is scant evidence so far) to produce it.
