Weblogic

The Globicus/qEcon Research US overall leading economic index reached a record-low -8.7 in December 2008 when the short leading index plunged to a record-low -16.7, the lowest level since the early 1950s. Having risen every month since then, the long leading index in May was at 8.4, the overall at 2.1 and the short leading at -0.6 indicating an end to the Great Recession. At -8.6 smoothed growth rate in May, the coincident index shows the US economy remained in a deep recession. However, the LEI is rising strongly, indicating the coincident index should turn positive in September. Q3 GDP may be modestly negative, but Q4 GDP should be strongly positive. 

The leading employment index was at -2.9 in June, indicates improving employment situation albeit at a slow rate. However, positive job growth is unlikely to occur until several quarters after the end of the recession. In the 1990 recession it took over a year before positive growth resumed, while in the 2001 recession it took even longer before employers expanded payrolls. In June nonfarm payrolls fell a more-than-expected 467,000 after May’s revised 322,000 decline.   

Globicus.com

New York, July 3, 2009