Leading Indicators Index in U.S. Rises Above Forecast

[Godhumor]

Source: Bloomberg

Jan. 20 (Bloomberg) -- The index of U.S. leading economic indicators increased in December more than forecast, a sign the recovery will gather steam in the new year.

The Conference Board’s gauge of the outlook for the next three to six months rose 1.0 percent after a 1.1 percent gain in November, the New York-based group said today. The December reading, the sixth consecutive monthly increase, exceeded the 0.6 percent gain in the median forecast of economists surveyed by Bloomberg News.

Improved consumer expectations, fewer firings and rising stock prices are boosting the outlook for household spending, the biggest part of the gross domestic product. Even so, Federal Reserve policy makers have indicated that until faster economic growth fuels bigger job gains, they will stick to their plan to pump $600 billion into the economy through June.

“We do see a lot of momentum in the index, which is consistent with GDP growth well north of 3 percent,” said Carl Riccadonna, a senior U.S. economist at Deutsche Bank Securities Inc. in New York. “Economic momentum is being maintained and the index suggests some acceleration.”



Read more: http://noir.bloomberg.com/apps/news?pid=20601068&sid=aL.Qs0V.B5bw

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Leading indicators are made up of:

Building Permits
Interest Rate Spread
Inverted Average Weekly Initial Claims for Unemployment Insurance
Stock Prices
Consumer Expectations Index
New Orders for Non-defense Capital Goods
Supplier Deliveries Index
New orders for consumer goods and materials
Average weekly manufacturing hours
real money supply

The first 6 improved. Supplier deliveries and new orders for consumer goods degraded. Manufacturing hours and money supply remained steady.

[Godhumor]

1. Giving my customary one bump.

This is a very positive, and substantial, sign of a recovering economy.

[ixion]

2. LOL @ "sign the recovery will gather steam in the new year"

a) There is no 'recovery' happening at all.

b) With the next wave of bad loan resets already underway (Option ARM and Alt-A loans this time) this year promises to be worse than the last year.

- The job market still sucks, and what IS out there is mostly garbage. Lower pay, hot-house working conditions, crappy benefits.

- The 'Too-Big-Too-Fail' boys have still NOT been made to write down the value of their assets, things like CDO's and CDS's. Trillions of dollars of garbage floating around out there that no one wants to acknowledge.

- Food prices and gas prices are soaring, neither of which gets reflected in the CPI.

Our economy is a Dead Man Walking, and will continue to get worse the longer we avoid fixing the real problems.

[pinqy]

3. Food and energy ARE in the CPI

http://www.bls.gov/news.release/cpi.t01.htm">Table 1 Right there, first group listed is food and beverages, weighted at 14.795% of the all items index (the headline number the media reports). A little further down is household energy: 4.028% of the total index, and then there's motor fuel at 4.525%

So not only are food and energy included, but they have a significant impact on the index.

[DCBob]

5. Sounds like you long for the "good ole days" of the Bush era ponzi scheme economy.

It will take years maybe decades to repair the monumental mess left by the previous administration. Just because the process is painfully slow doesnt mean we arent in a recovery now.

[ixion]

6. No, Sir. What you describe is EXACTLY what we have now

I long for the days of REAL MARKET VALUE, which we don't have now.

[DCBob]

8. I wouldnt say "exactly"..

at least there has been an attempt to fix the main issues that led us to the real estate fiasco. I doubt it will happen again.. at least not in the same way. There are serious problems but clearly things have improved from a couple of years ago.

[DCBob]

4. There are indicatiors across the board suggesting we are finally on the road to real recovery..

Problably the most signficant being that the Repbulicans are now trying to take credit for it. Pathetic losers.

[Thor_MN]

7. pump $600 billion into the economy

Every cent given to business is wasted - supply side stimulus is asinine. What sane company is going to increase production of shit they can't sell because no one can afford it? Money given to companies is squirreled away, and used as justification for bonuses to the executives.