Leading Indicators Rise In April

The Leading Economic Indicators for the U.S. has finally registered an increase for April.  This is the first increase in at least six months.

One concern about the leading indicators is the amount that the rising stock market contributed to the higher index. The last time the stock market contributed this much to the index was in 1982¹.

Possibly more importantly, the ratio of coincident indicators to lagging indicators may have hit bottom. The ratio has been at 89.6 from January through March and has registered an increase to 89.9 in April. 

The data for March and April is still preliminary, but this suggests that worst may be behind us. This isn't growth, but the economic situation is deteriorating at a slower pace.

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Source:
1. Tim Quinlan. Leading Indicators Turn Positive in April.
Wachovia Economics Group. May 21, 2009.
http://www.wachoviasec.com/wachoviasec/WSICommentary/05-21-09_indicator2.pdf

© 2009 Michael Cale