U.S. Economy: Leading Index Shows Slump May Be Ending (Update1)

[FarCenter]

By Bob Willis

July 20 (Bloomberg) -- The index of U.S. leading indicators rose in June for a third consecutive month, reinforcing signs the economy may be emerging from the worst recession in five decades.

The Conference Board’s gauge of the economic outlook for the next three to six months increased 0.7 percent, more than forecast, after a revised 1.3 percent gain in May, the New York- based research group said today. It is the first time the index has climbed for three months in a row since 2004.

Smaller job losses, rising stock prices and stabilization in homebuilding and manufacturing are evidence that government efforts to stem the financial crisis and lower borrowing costs may pay off. A jobless rate that is forecast to reach 10 percent and falling home values are a reminder that any expansion will be muted as consumers rein in spending and boost savings.

“The numbers are signaling an outright turning point,” said James O’Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. “The recession will end in the third quarter. We’re moving in the right direction.”

Stocks, one component of the leading index, extended gains after the report. The Standard & Poor’s 500 Index, which has soared more than 40 percent since its March 6 intraday low, rose 1.1 percent to close at 951.13 today in New York. An advance in stocks last month contributed 0.1 percentage point to the leading index.

<SNIP> http://www.bloomberg.com/apps/news?pid=20601068&sid=aZA46FdvUO3A

[bluestateguy]

1. It'll be like the containment of a disastrous house fire that burns the whole house down

Great, the fire is out! The burning has stopped! But the house has been destroyed; there is a pile of rubble, and rebuilding will not be quick or easy.

[FarCenter]

2. Actually, GDP had decreased only a few percent at most

depending on how you measure.

[timeforpeace]

3. Now that wasn't so bad, was it?

[scarletwoman]

4. "Smaller job losses"! Woo Hoo!

Farking lying bozos. Quit pissing on us and telling us it's raining!

When are we going to start making more stuff here? There's only ONE economic indicator that really measures reality -- more jobs at a living wage.

sw

[rockymountaindem]

5. And how are we going to get more jobs and a living wage without stopping the decline in GDP?

Everybody knows that just because there is some good news it doesn't mean happy days are here again, but the there have to be some indicators of at least a halt in the implosion before we can get back on track. Can't we be happy about anything?

[scarletwoman]

7. The GDP is nothing but an abstract number calculated from a totally arbitrary data set.

JOBS is the reality. Put people to work making the things that people need and want -- as in, actual tangible products like clothing and furniture -- and the economy will improve.

The financial sector produces nothing of real value. All it's good for is making rich people richer. As an element of the GDP, it's utterly meaningless.

sw

[FarCenter]

8. Clothing? A lot of people have enough clothing to last a year or two

You can hardly give the stuff away.

The average American's closets are stuffed with all the clothing imported from Asia in the last two decades.

[scarletwoman]

9. Do you have children? They grow larger as time goes on. They require new clothes and shoes.

Sometimes as often as twice a year, if not more in some years.

Perhaps you are unaware of all the textile factories that have been closed down over the past couple of decades. Oddly enough, they USED to be viable businesses, for many decades. Generations of workers found employment with them.

I'm old enough to remember when "Buy U.S.A.!" was a source of pride.

sw

[FarCenter]

11. Yes children need new (or hand-me-down) clothes each year

I'm old enough to remember that I got a new pair of shoes, 2 pair of pants, 4 shirts, overshoes, a jacket, and a winter coat each year (plus some socks and underwear). Some of the above, such as the winter coat and jacket, would be hand-me-downs from my brother or cousins, etc.

By those standards, lots of people have enough clothes in their closets to not buy more for years. Especially, the retiring baby boom generation, who will only need to buy underwear and socks until they die.

[HughMoran]

6. This is terrible news

I mean the Repukes and DUocrats will not like this news at all.

[notesdev]

10. On what fundamentals?

These people are either fooling themselves or trying to fool you.

[HamdenRice]

12. Anecdotal evidence here -- a lot of housing construction has restarted

There was a lot of redevelopment happening here in Queens. It just ended, often mid construction, maybe 9 months before the actual crisis of September. It was obvious something big and bad was coming.

Almost all of them have restarted. I don't think there is going to be new development, but it looks like enough credit is flowing to allow half started projects to at least finish. They've probably gone through foreclosure and auction. It's really miraculous though that anyone is getting loans -- even enough to complete the projects and avoid total loss on the construction that was already put in.