US Index Bodes Well For Recovery
May 28th, 2009
An index developed decades ago by the US Independent Economic Cycle Research Institute suggests the US economy, and thus the world, may recover before the end of the year. The growth rate of the Weekly Leading Index, composed of forward looking indicators for jobs, sales, income and output, has improved by a third from its low of December 2008, when it fell to 30%.
The rate is still negative, but the curve is suggesting an upturn. The Institute says in 16 of the last 17 recessions a curve like the one currently showing was followed by recovery in about four months. The only concern is the one which didn’t follow the pattern - it was the Great Depression in 1930. Then after months of climbing, the index went south along with the economy, for quite a while.
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