Economic Outlook: Difference between revisions

Economic Outlook (view source)

Revision as of 17:06, 5 April 2023

867 bytes removed , 5 April 2023

→‎3. Conference Board Leading Index

MagaNH6

Administrators

3,882

edits

@@ Line 77: / Line 77: @@
 === 3. Conference Board Leading Index ===
-The LEI is comprised of 10 indicators that cover a wide range of economic activity, including job growth, housing construction, and stock prices. The index is designed to provide a broad-based look at the health of the economy and can be used to predict turning points in the business cycle.
+Details:
-When the US LEI falls more than 4 percent over a span of six months, it enters the recessionary territory. And the index 3Ds rule provides signals of impending recessions 1) when the diffusion index falls below the threshold of 50 and simultaneously 2) when the decline in the index over the most recent six months falls below the threshold of -4.0 percent. <ref>https://www.conference-board.org/topics/recession/Leading-Indicators-Recession</ref> The index has an average lead time of 7 months and has a 100% track record when the Y/Y change turns negative for 2+ months in a row.
 Current Data:
@@ Line 85: / Line 83: @@
 * The Conference Board Leading Economic Index® (LEI) for the U.S. fell again by 0.3 percent in February 2023 to 110.0 (2016=100), after also declining by 0.3 percent in January
 * The LEI is down 3.6 percent over the six-month period between August 2022 and February 2023—a steeper rate of decline than its 3.0 percent contraction over the previous six months (February–August 2022).<ref>https://www.conference-board.org/topics/us-leading-indicators</ref>
-# The recession signal was hit in August 2022.<ref>https://www.conference-board.org/topics/us-leading-indicators/press/us-lei-sept-2022#:~:text=The%20Conference%20Board%20Leading%20Economic,over%20the%20previous%20six%20months.</ref>
+* The recession signal was hit in August 2022.<ref>https://www.conference-board.org/topics/us-leading-indicators/press/us-lei-sept-2022#:~:text=The%20Conference%20Board%20Leading%20Economic,over%20the%20previous%20six%20months.</ref>
 The index criteria gave the recession signal on August 2022, and since then the index has deteriorated further. Given the track record of the index and the lead time of 7 months, risks of recession in the US economy are amplified significantly in Q2 2023 onwards.