US Growth Unexpectedly Improves According To Leading Indicators

Daily Forex Fundamentals | Written by DailyFX | Oct 20 08 14:48 GMT |

Considering the drop in consumer spending, ongoing housing sector recession, pinch on business activity and the new ills borne from the financial market crash, there are few traders or policy makers expecting the US economy to avoid a recession. However, the Conference Board's Leading Indicators composite indicator offers preliminary evidence that the downturn in the world's largest economy may in fact be short-lived. According to the September reading for the gauge that uses timely indicators to forecast growth in the coming three to six months, output is expected to pick up 0.3 percent through the final quarter of the year. This improvement was sized up against forecasts for a 0.1 percent contraction and follows the worst reading in a year. Data has been so bad recently in fact that 10 of the past 12 readings have projected no or negative growth. So, is this reading the turning point; or will momentum carry the economy into negative territory. The market already expects a recession, but for confirmation we should look to the individual components of the report. Employment readings, building permits and stocks figures had all fallen - obvious trends. However, positive contributions came from consumer orders, purchases, forecasts as well as the money supply. Considering the deterioration in the broader economy, consumer related improvements are probably unrealistic (or otherwise pickups from already very depressed readings). As for money supply, this was a forced injection central banks; but a move that hasn't improved lending or expansionary trends as of yet. DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.