Rusted Sky

Jerry:

I was curious about what Ethan Harris meant when he said:

"After slowing in November, the economy seems to have regained its stride,".

The term 'slowing' seemed a bit vague to me so I did a bit of googling and found this:

Next month's release of the U.S. LEADING ECONOMIC INDICATORS AND RELATED COMPOSITE INDEXES will incorporate annual benchmark revisions to the composite indexes which will bring them up-to-date with revisions in the source data. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are not incorporated until the January release of each year when an annual benchmark revision is made and the entire histories of the indexes are recomputed.

The Conference Board announced today that the U.S. leading index increased 0.1 percent, the coincident index increased 0.2 percent and the lagging index increased 0.5 percent in November.

* The leading index increased for the third consecutive month in November. From May to November, the leading index rose 0.2 percent (a 0.4 percent annual rate). Initial claims for unemployment insurance (inverted) and building permits made the largest negative contributions to the leading index in November. In addition, strengths and weaknesses remained roughly balanced among the leading indicators in recent months.
* The coincident index increased again in November. This measure of current economic activity has been growing steadily, although its growth moderated somewhat in recent months. From May to November, the coincident index grew at a 1.1 percent rate (a 2.1 percent annual rate). In addition, the strengths among the coincident indicators have been very widespread in recent months. At the same time, real GDP growth slowed to a 2.2 percent (annual) rate in the third quarter, following a 5.6 percent gain in the first quarter and a 2.6 percent gain in the second quarter.
* The leading index was fluctuating around a slightly downward short-term trend since January, and, despite three consecutive gains, it is still 0.6 percent below its most recent high reached at the beginning of the year. The decline in the growth rate of the leading index since the beginning of the year appears to have moderated in recent months, but the strength among the leading indicators has not been widespread. The recent behavior of the leading index so far still suggests that slow economic growth is likely to continue in the near term.

LEADING INDICATORS. Four of the ten indicators that make up the leading index increased in November. The positive contributors — beginning with the largest positive contributor — were real money supply*, vendor performance, manufacturers' new orders for nondefense capital goods* and stock prices. The negative contributors — beginning with the largest negative contributor — were average weekly initial claims for unemployment insurance (inverted), building permits, interest rate spread, average weekly manufacturing hours and index of consumer expectations. The manufacturers' new orders for consumer goods and materials* held steady in November.

The leading index now stands at 138.2 (1996=100). Based on revised data, this index increased 0.1 percent in October and increased 0.4 percent in September. During the six-month span through November, the leading index increased 0.2 percent, with six out of ten components advancing (diffusion index, six-month span equals fifty percent).

COINCIDENT INDICATORS. All four indicators that make up the coincident index increased in November. The positive contributors to the index — beginning with the largest positive contributor — were employees on nonagricultural payrolls, industrial production, manufacturing and trade sales* and personal income less transfer payments*.

The coincident index now stands at 124.0 (1996=100). This index increased 0.2 percent in October and increased 0.1 percent in September. During the six-month period through November, the coincident index increased 1.1 percent.

http://www.conference-board.org/economics/bci/pressRelease_output.cfm?cid=1

Looks to me like 'slowing' is Lehman Brothers way of saying the U.S. economy in November didn't grow as fast as expected. This is a perfect example of pure negative spin on what would otherwise be a fairly optimistic report.

file under Lies, Damned Lies, and Press Releases.

otpu

You know, John, I could set you up a MT blog if you want it... (grin)

You're right, the 'slowing' is simply a reduced rate of growth. It's like all the 'benefit cuts' that used to be proposed which were simply a lessening of the rate of increase. Nobody was talking about doing AWAY with programs, but by the blather you sure thought they were going to cancel them competely...

J.

Yeah! What John said!