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Friday, June 22, 2012

Latest economic data

Here are two new pieces of economic data to look at.  Lets start with the Philly Fed index long term chart.

We got down a little further last fall then we are today, but then bounced sharply back into positive territory.  We can see that it does not get down to this level very often.  In looking at how this index reacts around recessions it does provide useful information.  If it does not bounce back above zero in the next 3 months, the odds that we are already in recession would be pretty high.  It is interesting that it was back above 0 in Oct. last year confirming the bottom in the market.  It is not doing that now with our current early June low.

Here is a look at Markit economics flash PMI.  This is a precursor look at the ISM number that will come out the first of next month.
We have had another sharp turn down which would seem to confirm the move down in the market.  This is not enough to indicate trouble yet.

Here is a look at the new orders data.

The new orders data is not really all that revealing.  However, check out the durable goods orders.  This has gone really negative for the first time since 2009.  The last recession was dated to Dec. 2007 and the data then was just about where we are now.  This chart never got anywhere near negative last fall.  I remember seeing a video of the guys on CNBC ribbing the ECRI guy for saying a recession was coming in April of 2008.  As we now know we were already in recession for several months at the time.  It is possible we are in recession already and just do not know it officially yet.  If that turns out to be the case the readers of this blog are pretty astute.  You might recall I had a poll about the economy a couple of weeks back and 70% said we were already in recession.  If that is the case we certainly have not seen the low in the market yet.


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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.