Index of Leading Economic Indicators

[ethics]

Not sure how many of you are interested in these but here's a report from one of our employees who is an Economist, Gary Bigg:

Ø The Conference Board reported that its index of leading economic indicators increased 0.2% in November. Expectations (as surveyed by Bloomberg) were for a gain of 0.1%. October’s decline, previously reported to be 0.3%, was revised down to a decline of 0.4%. Reflecting the economic soft patch that the economy hit this past summer, this index fell over the June-October period.

Ø Positive contributions to the index came from stock prices, money supply, consumer expectations, jobless claims and orders for nondefense capital goods and consumer goods. Negative contributions to the index came from vendor performance, average workweek, building permits and the yield curve.

Ø We are expecting real GDP growth of approximately 3.8% over the first half of 2005. This implies further gains in the leading index over this period.

[Steve]

The slow Christmas spending reported by major retailers over the weekend doesn't worry him?

[ethics]

Let me ask him....

[tke711]

It's interesting where that "slow spending" is this year. It's with the traditional big box stores and discount chains.

However, the "high end" and "luxury" stores are seeing huge increases this year.

Maybe that would explain why he is not worried about it?

[Steve]

That's what has me concerned. It's not that the rich are buying, they always buy. It's that the middle-class isn't buying....

[Biker]

What the hell are we going to buy with? Don't know about anyone else, but my budget has been extremely tight this year, and I don't see it improving much over the next 12 months.

[tke711]

That's what has me concerned. It's not that the rich are buying, they always buy. It's that the middle-class isn't buying....

Unless the middle class is also buying there. Maybe they are buying less quantity but higher quality?

Don't know...just a guess.

[Steve]

Nah, everything I've read puts most of the country in the same position Biker's at.

[Techie2000]

Well I'm glad the Republicans are doing such a great job with the economy, supporting our middle class and all...:whistle:

[LissaKay]

I'm in that same boat. The middle class is sinking lower and lower, the lower-middle class is getting crushed. The poor can't really get much worse off.

This was interesting: Report: U.S. Rentals Unaffordable to Poor (http://apnews.myway.com/article/20041220/D8737LRO0.html)


Most Americans who rely on just a full-time job earning the federal minimum wage cannot afford the rent and utilities on a one- or two-bedroom apartment, an advocacy group on low-income housing reported Monday.

For a two-bedroom rental alone, the typical worker must earn at least $15.37 an hour - nearly three times the federal minimum wage, the National Low Income Housing Coalition said in its annual "Out of Reach" report.

That figure assumes that a family spends no more than 30 percent of its gross income on rent and utilities - anything more is generally considered unaffordable by the government.


My rent (which is going up 6% next month), my electricity (which went up 15% a couple months ago), water (mercifully has stayed the same), and phone (up 10%) take 38% of my gross income, which has not increased and has little chance of doing so in the near future. Then, the cost of food, gasoline and clothing has sky-rocketed. A replacement for my 12 year old car is but a pipe dream now.

Spending? Those of us scratching by on incomes below the median are not spending on anything but the necessities these days.

[Biker]

Yup.. And lord help us if something catastrophic happens, such as a large repair bill to the vehicle.

[ethics]

Well I'm glad the Republicans are doing such a great job with the economy, supporting our middle class and all...:whistle:

I have no reins to blame them, but I would also state that stupid economic policies are not monopolized by the Republicans.

Still, someone better wake up and smell the coffee fast.

[Copzilla]

Well, a great deal of the pinch is at the pumps. The consumer dollar is a finite thing, and when strained in one direction, the other side suffers. We're paying more for energy now, and retailers will suffer.

[Steve]

Yup.. And lord help us if something catastrophic happens, such as a large repair bill to the vehicle.You mean like $700 for brakes all around two months ago....then another $498 last week for intake manifold gaskets and various other things? :eek:

[Techie2000]

I have no reins to blame them, but I would also state that stupid economic policies are not monopolized by the Republicans.

Still, someone better wake up and smell the coffee fast.Well I know Bush wanted to appoint that citizen's panel to revamp the tax code, although I'm not sure how much that would help. And you are right, socialized health care and such are not the solutions to this either. What scares me most is our increasing national debt and the trade defecit. They just seem to grow, and nothing is being done to fix that. If/When our economy hits the fan, I think that's gonna bit us in the rear, very hard.

[ethics]

What scares me most is our increasing national debt and the trade defecit. They just seem to grow, and nothing is being done to fix that. If/When our economy hits the fan, I think that's gonna bit us in the rear, very hard.

You've just summarized my fear of a Republican President AND Republican Congress. There's no emergency brake now. :(

[ethics]

The slow Christmas spending reported by major retailers over the weekend doesn't worry him?


Garry responds with...

Retail sales are not a component of the leading index. Retail sales are a component of coincident index, entering as a component of real manufacturing and trade sales. With regard to consumption spending, we believe that relatively high oil prices are constraining this sector and therefore are not surprised at the slowdown, indeed , it is part of our forecast. As oil prices recede, consumption growth is expected to grow.

[Steve]

Cool, thanks!

[ethics]

Wanted to specify who Gary means as "we". There are three economists in my company. Gary is new and I know him only from recently meeting them. The other two are personal friends.

Mickey Levy (http://www.pbs.org/newshour/bb/economy/july-dec01/jobless_9-07.html), whom you probably see a lot of if you watch CNBC, and Peter Kretzmer (http://www.fei.org/chapter/_meetings/meeting_detail.cfm?item_id=935) are the cream of the crop when you want information quick, reliable and something anyone can understand.

If you want a quick summary on anything economic, I'd suggest you start with their freely available weekly reports here: http://www.bofasecurities.com/featuredresearch/content/research.asp

[Copzilla]

HEY! He stole my post! lol