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Trivia Tidbit Of The Day: Part 315 -- Index Of Leading Economic Indicators.

Not So Shabby-

The Conference Board released this month's Index of Leading Economic Indicators this morning. Down 0.1%. Practically unchanged. The overall trend is pretty good, though (.pdf):

The leading index decreased slightly in March, and February's decrease was revised down due to data revisions in several underlying components. Despite the weakness in the leading index in February and March, its six month growth rate picked up to an average of 3.2 percent annual rate in the first quarter, up from an average growth rate of 2.7 percent in the fourth quarter, which was higher than its average growth of 1.8 percent in 2005. In addition, the strengths among the leading indicators have been widespread in recent months.

Remember when the networks used to show the following graph (.pdf) on a regular basis? And CNBC showed it several times a day, even weeks after its most recent release?

I do. I was somewhat of a CNBC junkie in the late 1990s. And they showed this graph so much, a few of the anchors started calling it the "LEI" or the "LEI Index" without any further explanation.

For those who were not CNBC junkies in the late 1990s, the Index of Leading Economic Indicators is supposed to put the economy into big picture perspective. So often, folks were chasing one or two economic indicators up and down, fretting and cheering the economy from one day to the next. The index takes into account the following: 1) manufacturers’ new orders for nondefense capital goods, 2) real money supply, 3) average weekly manufacturing hours, 4) manufacturers’ new orders for consumer goods and materials, 5) interest rate spread, 6) vendor performance, 7) index of consumer expectations, 8) average weekly initial claims for unemployment insurance (inverted), 9) building permits, and 10) stock prices.

As an optimist, I tend to believe the economy is in decent shape currently-- and that it will remain in decent shape over the next few years. But government policies matter.

If Congress lets tax cuts expire (which is essentially a tax hike), continues blocking foreign investment in the U.S., erects trade barriers, demagogues relentlessly about "outsourcing" and "price gouging," and fails to reform any entitlement program, we could easily see an economic bonk.

How ridiculous and irritating would it be for Congressional Republicans to wreck the free market boom we're currently experiencing by turning into nativist, populist, anti-market, anti-reform tax-hikers? We already have Democrats for that.

Previous Trivia Tidbit: Morality Of Skirting Taxes.

Posted by Will Franklin · 20 April 2006 01:21 PM

Comments

Posted by: Zsa Zsa at April 20, 2006 08:12 PM