LEI: Who You Gonna Believe, Me or Your Lying Eyes?

Source: Economics Group of Wells Fargo Bank, N.A. Summary April marks the 10th month in which the six-month average change in the Leading Economic Index has been below a key recession threshold. The warnings may land a little flat amid a run of decent labor and consumer data, but history is on the side of the LEI. I Intend to Live Forever… or Die Trying While incoming data demonstrate an underlying resilience in economic growth, the Leading Economic Index (LEI) continues to show clear sign of recession. The index fell 0.6% in April and has now fallen nearly 9% from its peak (chart). The six-month average change has been below the threshold historically consistent with recession for ten straight months (chart). The pain is also spreading. Consumer expectations have exerted the most persistent weakness on the overall LEI over the past two years by providing a drag for 21 straight months. But the ISM new orders index, a key manufacturing component, has also been weak and negative for 14 straight months. Financial-related components have also turned recently, like the leading credit index and interest rate spread. There are initial signs of weakness in labor-related indices as well. READ FULL ARTICLE >>