The January Chicago Fed National Activity Index (CFNAI)(pdf) updated as of January 26, 2012:

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The USA TODAY/IHS Global Insight Economic Outlook Index:

An excerpt from the January 3 update titled “Index forecasts weaker growth” :

The December update of the USA TODAY/IHS Global Insight Economic Outlook Index shows real GDP growth, at a six-month annualized growth rate, increasing to 2.5% in January and then slowing to 1.8% in May. While employment, housing (mostly the multifamily sector) and consumer spending are slowly recovering, concerns about the Eurozone and world growth continue.

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The ECRI WLI (Weekly Leading Index):

As of 1/13/12 the WLI was at 123.4 and the WLI, Gr. was at -7.5%.

A chart of the WLI Growth since 2000, from Doug Short’s blog of January 20 titled “ECRI Recession Call:  Growth Index Contraction Eases” :

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The Dow Jones ESI (Economic Sentiment Indicator):

The Indicator as of January 9 was at 41.9, as seen below:

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The Aruoba-Diebold-Scotti Business Conditions (ADS) Index:

Here is the latest chart, depicting 1-21-10 to 1-21-12:

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The Conference Board Leading (LEI) and Coincident (CEI) Economic Indexes:

As per the January 26 release, the LEI was at 94.3 and the CEI was at 103.4 in December.

An excerpt from the January 26 release:

Added Ken Goldstein, economist at The Conference Board: “The CEI and other recent data reflect an economy that ended 2011 on a positive note and the LEI provides some reason for cautious optimism in the­ first half of 2012. This somewhat positive outlook for a strengthening domestic economy would seem to be at odds with a global economy that is losing some steam. Looking ahead, the big question remains whether cooling conditions elsewhere will limit domestic growth or, conversely, growth in the U.S. will lend some economic support to the rest of the globe.”

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1318.43 as this post is written

Notable excerpts from this January 10 Press Release include:

Says Lynn Franco, Director of The Conference Board Consumer Research Center: “The bounce back in CEO Confidence in the final months of 2011 was due primarily to an improved short-term outlook. Overall, however, CEO confidence remains rather subdued. On the inflation front, CEOs anticipate price increases of about 1.8 percent for 2012, down from last year’s estimate of 3.3 percent.”

also:

CEOs’ assessment of current economic conditions was less pessimistic, with 17 percent saying conditions have improved compared to six months ago, up from just 11 percent last quarter.

Other recent surveys of business executives include the December 14 Business Roundtable’s CEO Economic Outlook Survey (pdf) and the December 15 Duke/CFO Magazine Global Business Outlook Survey (pdf).

_____

I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not agree with many of the consensus estimates and much of the commentary in these forecast surveys.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1326.06 as this post is written

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1314.50 as this post is written

The commentary largely focuses on when, and if, the Federal Reserve will do another round of “bond purchases.”

An excerpt from the article:

Of the 22 economists who expect more bond buying from the central bank, 19 forecast that it would take place before June. On average, they expect a new program would total less than $500 billion, making it the smallest one yet. The first round of bond buying, initiated by the Fed in 2008 and ended in 2010, totaled $1.25 trillion in mortgage-backed securities, $300 billion in Treasury bonds and $175 billion in federal agency debt. The second round ended in June 2011 and consisted of $600 billion in purchases of U.S. Treasurys.

Also, as seen in the Q&A section (in the spreadsheet), the economists put the probability of a U.S. recession in the next 12 months at 19%.

–

The current average forecasts among economists polled include the following:

GDP:

full-year 2011 : 1.7%

full-year 2012:  2.4%

full-year 2013:  2.8%

full-year 2014:  3.1%

Unemployment Rate:

December 2012: 8.2%

December 2013: 7.7%

December 2014: 7.0%

10-Year Treasury Yield:

December 2012: 2.56%

December 2013: 3.21%

December 2014:  3.82%

CPI:

December 2012:  2.2%

December 2013:  2.4%

December 2014:  2.6%

Crude Oil  ($ per bbl):

for 12/31/2012: $99.41

(note: I comment upon this WSJ Economic Forecast survey each month; commentary on past surveys can be found under the “Economic Forecasts” category)

_____

I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1293.67 as this post is written

For a variety of reasons, I am not as enamored with ECRI’s WLI and WLI Growth measures as many are.

However, I do think the measures are important and deserve close monitoring and scrutiny.

The movement of the ECRI WLI and WLI, Gr. is particularly notable at this time, as ECRI publicly announced on September 30 that the U.S. was “tipping into recession.”  I featured excerpts from their statement in the October 3 post (“ECRI Recession Statement Of September 30 – Notable Excerpts“)

Below is a long-term chart, on a weekly basis through January 13, of the ECRI WLI (defined at ECRI’s glossary) from Doug Short’s blog post of January 13 titled “ECRI Recession Call: Growth Index Contracts Further” :

(click on charts to enlarge images)

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This next chart depicts, on a long-term basis, the WLI, Gr. through January 13:

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1289.09 as this post is written

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1274.41 as this post is written

The December Chicago Fed National Activity Index (CFNAI)(pdf) updated as of December 22, 2011:

-

The USA TODAY/IHS Global Insight Economic Outlook Index:

An excerpt from the December 1 update titled “Index forecasts weaker growth” :

The November update of the USA TODAY/IHS Global Insight Economic Outlook Index shows real GDP growth, at a six-month annualized growth rate, increasing to 2.2% in November and December and then slowing to 1.6% in April. Persistent unemployment, elevated debt levels, high energy and food prices and low confidence have stalled consumer spending. Businesses are hesitant to expand amid uncertainty.

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The ECRI WLI (Weekly Leading Index):

As of 12/9/11 the WLI was at 122.3 and the WLI, Gr. was at -7.5%.

A chart of the WLI Growth since 2000, from Doug Short’s blog of December 16 titled “ECRI Recession Call:  Growth Index Contraction Moderates Fractionally” :

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The Dow Jones ESI (Economic Sentiment Indicator):

The Indicator as of December 13 was at 42.0, as seen below:

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The Aruoba-Diebold-Scotti Business Conditions (ADS) Index:

Here is the latest chart, depicting 12-17-09 to 12-17-11:

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The Conference Board Leading (LEI) and Coincident (CEI) Economic Indexes:

As per the December 22 release, the LEI was at 118 and the CEI was at 103.7 in November.

An excerpt from the December 22 release:

Says Ataman Ozyildirim, economist at The Conference Board: “November’s increase in the LEI for the U.S. was widespread among the leading indicators and continues to suggest that the risk of an economic downturn in the near term has receded. Interest rate spread and housing permits made the largest contributions to the LEI this month, overcoming a falling average workweek in manufacturing, which reversed its October gain. The CEI also rose on improving employment and personal income although industrial production fell in November.”

Says Ken Goldstein, economist at The Conference Board: “The LEI is pointing to continued growth this winter, possibly even gaining momentum by spring. For the second month in a row, building permits made a relatively strong contribution and there is a chance that the long decline in housing is finally slowing. However, this somewhat positive outlook for the domestic economy is at odds with a global economy that appears to be losing steam. In particular, a deeper-than-expected recession in Europe could easily derail the outlook for the U.S. economy.”

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1254.00 as this post is written

The commentary largely focuses on the housing market and when the economists polled believed it might recover.

I found these excerpts regarding the housing market to be interesting, although I don’t agree with them:

The economists’ predictions reflect a market that is at or near a bottom and showing signs of stabilization. New construction in 2011 is forecast to be mostly steady with a year earlier at around 600,000 homes and climbing to around 720,000 in 2012. But recovery may still be some time away due to several factors.

also:

Goldman Sachs economists Hui Shan and Sven Jari Stehn last week said their model for home prices indicates a bottom some time in 2012. They note that affordability has improved in recent years, helping the market to stabilize but other factors are preventing the sector from taking off.

Also, as seen in the Q&A section (in the spreadsheet), the economists put the probability of a U.S. recession in the next 12 months at 23%.

–

The current average forecasts among economists polled include the following:

GDP:

full-year 2011 : 1.7%

full-year 2012:  2.3%

full-year 2013:  2.7%

full-year 2014:  3.1%

Unemployment Rate:

December 2011: 8.8%

December 2012: 8.5%

December 2013: 8.0%

December 2014: 7.2%

10-Year Treasury Yield:

December 2011: 2.08%

December 2012: 2.75%

December 2013: 3.35%

December 2014:  3.97%

CPI:

December 2011:  3.3%

December 2012:  2.2%

December 2013:  2.4%

December 2014:  2.5%

Crude Oil  ($ per bbl):

for 12/31/2011: $97.47

for 12/31/2012: $98.26

(note: I comment upon this WSJ Economic Forecast survey each month; commentary on past surveys can be found under the “Economic Forecasts” category)

_____

I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1241.30 as this post is written

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1255.38 as this post is written

The post examines the inability of the New York Fed, as well as the vast majority of professional forecasters in general, to predict the “Great Recession.”  It also mentions the failure of forecasters to predict the decline in housing.

Although I found the entire post to be worthwhile, here are a few notable excerpts:

Economic forecasters never expect to predict precisely. One way of measuring the accuracy of their forecasts is against previous forecast errors. When judged by forecast error performance metrics from the macroeconomic quiescent period that many economists have labeled the Great Moderation, the New York Fed research staff forecasts, as well as most private sector forecasts for real activity before the Great Recession, look unusually far off the mark.

also:

On the basis of their analysis, one could have expected that an October 2007 forecast of real GDP growth for 2008 would be within 1.3 percentage points of the actual outcome 70 percent of the time. The New York Fed staff forecast at that time was for growth of 2.6 percent in 2008. Based on the forecast of 2.6 percent and the size of forecast errors over the Great Moderation period, one would have expected that 70 percent of the time, actual growth would be within the 1.3 to 3.9 percent range. The current estimate of actual growth in 2008 is-3.3 percent, indicating that our forecast was off by 5.9 percentage points.

Using a similar approach to Reifschneider and Tulip but including forecast errors for 2007, one would have expected that 70 percent of the time the unemployment rate in the fourth quarter of 2009 should have been within 0.7 percentage point of a forecast made in April 2008. The actual forecast error was 4.4 percentage points, equivalent to an unexpected increase of over 6 million in the number of unemployed workers. Under the erroneous assumption that the 70 percent projection error band was based on a normal distribution, this would have been a 6 standard deviation error, a very unlikely occurrence indeed.

The post also examines more recent (April 2011) forecast performance, and finds that “the level of real activity in 2011 has been disappointing relative to expectations.”

My comments:

Economic forecasts and their accuracy is of great importance for a variety of reasons.  It is because of this importance that this blog features many economic forecasts and financial market predictions.

I have previously commented on forecasters’ inability to predict the adverse financial events of 2007-2010.   As well, a page titled “Predictions” serves as “a brief recap (in no way all-inclusive) of some forecasts and predictions that have been made during the Financial Crisis.”

The accuracy of predictions prior to and during the “The Great Recession” serves as a reminder to how difficult financial crises, and their impacts, are to predict.  The inability to predict “The Great Recession” should serve to cast uncertainty on forecasters’ ability to predict future severe economic weakness, especially since the level of complexity inherent in the overall economic environment is, according to my analyses, growing.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1194.85 as this post is written