Economic Indicators

Leading Indicators
The two sets of weekly indicators remain in strong uptrends and are
close to turning up when measured yr/yr. They have lost some
momentum over the past 2 weeks as sensitive materials prices have
leveled off. The action of the indicators point to a "V" shaped bounce
for the economy in the early stages. The monthly indicators are
also strongly up, paced by a rapid surge in the index of new orders
for manufacturing. With 100 = to expansion, the combined index for
commercial / mfg. has moved up from a 12/08 low of 62.6 to 114.8
for August. This represents a substantial positive reversal of trend
from a downmove in order momentum that ran from early 2004
through mid-2008. Again, the pattern for now is a "V".

Also of note here is that the index of mortgage purchases has been
basing after a severe 3 year downtrend. This suggests a lift to
housing sales (already recently seen). The Monster Inc. index of web
job listings peaked over 2007 and heralded the end of expansion. It
is now in basing mode and jumped up sharply in August (Monster).

Economic Power Index
The swift positive turnaround in this index over Half 2 '08 helped
significantly to stabilize consumer spending and the economy. The
turn was fuelled by a fast rise in the real wage as inflation fell away.
The index is now only slightly positive. Measured yr /yr, the real
wage remains a strong 4.2%, but this is nearly offset by a 3.9%
decline of civilian employment. There will be a dicey interval ahead.
Job losses are moderating, but so is the real wage.

Capital Slack Measure
This measure continues to show deeply ample slack: Short rates are
near zero, unemployment is at 9.7% and capacity utilization is very
low. The extent of the slack is sufficient to underwite a prolonged
period of expansion if the recovery takes hold.

Global
Worldwide indicators replicate the recent US performance. With 50
= to expansion, the global output measure has moved up sharply
from a 11/08 low 0f 35.5 to 52.1 through 8/09, and the new
orders component has jumped from a 11/08 low of just 35.2 to 51.1
through 8/09. Both series are giving the "V" sign for now.