According to Bloomberg, the latest reading of one widely-watched indicator confirmed that the U.S. economy is on the road to recovery.
The index of U.S. leading indicators rose more than anticipated in December, a sign the economy will keep growing through the first half of the year.
Fewer firings, rising stock prices and Federal Reserve efforts to keep interest rates low propelled the leading index, while growth in exports and inventories have spurred production. Sustained demand and faster economic growth will hinge on employment gains that have yet to materialize.
“The economic recovery still has momentum,” said Tim Quinlan, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who correctly forecast the December gain. “Right now, the linchpin is confidence. Both businesses and consumers need to feel like it’s a worthwhile thing to start spending money again.”
And yet, while the worst is supposedly behind us, another statistic released today by the Conference Board, the index of coincident indicators, rose only marginally in December and remains below where it was last spring.
In fact, while the LEI has hit a new high (after rising for nine straight months from the March lows), the spread between that index and the CEI has also hit a record.
In other words, hope has outpaced reality to a degree that has not been seen over the course of five decades.
A recipe for disappointment?
When this is all said and done, many will wonder why the idea that spending money you do not have on the hopes that somehow you will have it was a silly economic model.
Posted by: GYSC | January 21, 2010 at 10:52 PM
Double dip is coming...How come no one is talking about how the job losses are not slowing down.
It goes to show, NO one cares once your unemployed.
Posted by: Matt | January 22, 2010 at 09:21 AM
In other words, go buy something, drive yourself deeper in debt you useless eaters.
Posted by: Mark G. | January 22, 2010 at 10:24 AM
For those who forget or deny it,its a class struggle.Charts coming from the top
echelon will never reflect the feelings of the proletariat.
Even the supreme court, this bastion of upper class fairness will rule for the benefit of big Money. Hope for the Elite, despair for the working family
Posted by: roger | January 22, 2010 at 02:58 PM
while the LEI has hit a new high (after
...
another trash being peddled by mainstream economists..
60 % of weight in lEI is SP500+money aggregates + manufacturing..
sp500 - pumped up.
money aggregates - don't get my started.. check out M0
manufacturing.. - cash for clunkers ,, anyone...
why not to include U6 unempl rate, US budget deficit and housing prices into,...
i guess picture will be quite opposite...
Alex
Posted by: alex west | January 23, 2010 at 03:52 AM