Leading Economic Index Points to Stall Out
This morning, the Conference Board, a nonprofit economic research group, said that its leading economic index -- a measure of how business might act in the
Jul 31, 20201K Shares508.1K Views
This morning, the Conference Board, a nonprofit economic research group, said that its leading economic index — a measure of how business might act in the coming months, based on data like consumer expectations, stock prices and hours worked — increasedjust 0.1 percent between June and July. That is less that economists expected. The slight incline indicates a stall out in the recovery, and follows a 0.3 percent decline in June and a 0.5 percent increase in May.
“The indicators point to a slow expansion through the end of the year,” Ken Goldstein, a Conference Board economist, said in a statement. “With inventory rebuilding moderating, the industrial core of the economy has moved to a slower pace. There appears to be no change in the pace of the service sector. Combined, the result is a weak economy with little forward momentum. However, the good news is that the data do not point to a recession.”
In English, and with a little context: Businesses have stopped restocking inventory, as they were earlier in the year, helping the economy. So, an uptick in production or hiring seems unlikely until consumers return to buying more goods. Consumers won’t start buying more goods until unemployment falls, but unemployment looks like it might climb. That does not necessarily mean a double dip. But it also does not mean Recovery Summer.
Hajra Shannon
Reviewer
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