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Yellen Labor Dashboard Reaches Target
Shortly after taking up office, Federal Reserve Chair Janet Yellen used her “jobs data dashboard” to justify the Fed’s easy money policies and to argue there’s still considerable slack in the labor market five years after the recession’s end. Seven of the nine gauges on this dashboard had not recovered to levels reached before the last recession, reinforcing her belief that the economy would need “extraordinary support” from the Federal Reserve for “some time to come.”
Things That Go Bump in the Night
The U.S economy appears unstoppable right now. Just about every leading and co-incident indicator you can think of is pointing to positive growth. Among the hundreds of indicators we follow for our models on a daily basis, we have discovered a few that are displaying worrying trends and flagging a future recession. It should be pointed out that a handful of indicators flagging recession should not mean we have to push the panic button. A large raft of indicators all concurring is what you should be looking for, and right now a large raft of indicators is confirming economic growth.
Valuation estimate of SP500 2015 returns : 2,246 target
The RecessionALERT Valuation Index (RAVI) is a multifactor valuation model that examines cyclically adjusted trailing SP-500 earnings (various multi-decade horizons), the SP-500 total-return index level, total stock market capitalization, Gross Domestic Product, non-financial corporate equities and liabilities, non-financial corporate business net-worth and percentage of investors allocation to stocks versus cash and bonds to determine 10, 5, 3, 2 and 1 year forecasts for the SP-500 Total Return Index (dividends re-invested).
U.S. Economy Prints 32-month Low: Recession Risks Escalate
It's been 4 months since the 3rd "Summer Swoon" in this expansion when many commentators were trotting out recession scares and imminent collapses in the stock market. Since then the SP-500 has risen over 9%, peaking at 12% gains some weeks back. There is now an interesting divergence developing between the leading data (stock market, money supply, credit spreads etc.) that is implying positive expansion ahead and the co-incident data that is implying a drift toward possible recession.
Recession is Not Imminent
Perma-bears are bombarding us with alarm bells, sounding the doom of the US economy. We find ourselves in yet another 'summer slowdown scare,' for the third year running. In 2010 and 2011, the purported slowdowns turned out to be soft landings. Investors who ran to the sidelines stared in disbelief as the stock market roared ahead, leaving them behind. We are likely in the same position now.
The Unemployment Rate: A Coincident Recession Indicator
For what is considered to be a lagging indicator of the economy, the unemployment rate provides surprisingly good signals for the beginnings and ends of recessions. We have developed a model that uses unemployment figures to produce these signals and to determine the probability of when a recession may start.
Further Improving the Use of the ECRI WLI
Last week, we described how best to use the growth figure of the ECRI's WLI to predict recessions, but we also highlighted an impediment to our research -an inability of outsiders to replicate the index. Last week, however, the formula to calculate the WLI growth figure was found. Armed with that data, we have made further progress to improving the recession-dating performance of the WLI.
Using the ECRI WLI to Flag Recessions
In September 2011, the ECRI proclaimed a new U.S recession would begin sometime in the coming year. It based its prediction on a host of its own internal long-leading indexes, together with its widely followed weekly leading index (WLI). I want to focus on the proper use of the WLI and examine its accuracy in recession dating, in order to put this current recession call into context.
US Recession - An Opposing View
A large number of reputable analysts and companies are forecasting a new U.S recession on the immediate horizon. Attracting the most attention is ECRI, which made a public recession call on September 30th and several television reaffirmations since. But an examination of a broader range of other composite economic indicators shows that sole reliance on ECRI's forecast would be misplaced.
15 results found.