Leading Economic Indicators Decline
The decrease in the leading economic indicators, for the second month in a row, is more evidence of a coming economic slowdown.
Sept. 21 (Bloomberg) — The index of U.S. leading economic indicators fell 0.2 percent in August for a second straight month, signaling the slowdown in the economy will continue into early 2007.
The decline is due to declines in both housing permits, which I noted earlier, and a decline in consumer optimism.
“The evidence for slower growth over the next year is becoming overwhelming,” Steven Wood, president of Insight Economics LLC in Danville, California, said before the report. “Recent weakness in the index suggests further slowing in economic growth in the months and quarters ahead.”
The index fell at an annual rate of 1.2 percent in the last six months. It would take a 3.5 percent annualized decline to signal contraction in the economy, according to the Conference Board. The last time the index met that criterion was in September 2000, six months before the start of the last recession.
So when Bush says that the economy is strong and the outlook is favorable keep this kind of data in mind. While indeed the economy is not currently in a recession, things do appear to be slowing down.