Leading Indicators Signal Slow Growth
Leading Indicators Signal Slow Growth
The index of Leading Economic Indicators (LEI) notched a modest gain in April - up 0.1 percent - signaling hope that the U.S. economy may avoid an outright recession, despite significant headwinds from higher oil and gasoline prices as well as ongoing concerns in credit markets.
Close Call, But No Recession
Despite April’s positive reading, the year-over-year change in the LEI is consistent with previous recessions, although the three month annual rate suggests signs of bottoming.The coincident indicator index has been perfectly even for three months in a row, a reflection of an economy where growth has slowed to a virtual standstill.
Stock Prices and Money Supply Both Positive
A strong rally in the stock market during the month of April provided the strongest positive gain of 0.16 percentage point. The S&P 500 index was up 4.8 percent in April.The LEI might have been higher if it weren’t for a strong negative offset from consumer sentiment. Unfortunately the sentiment reading for May will be negative as well.
Wachovia Corporation
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