The following is an update of various indicators that are supposed to predict and/or depict economic activity. These indicators have been discussed in previous blog posts:
The March 2020 Chicago Fed National Activity Index (CFNAI) updated as of March 23, 2020:
The CFNAI, with current reading of .16:
source: Federal Reserve Bank of Chicago, Chicago Fed National Activity Index [CFNAI], retrieved from FRED, Federal Reserve Bank of St. Louis, March 23, 2020;
The CFNAI-MA3, with current reading of -.21:
source: Federal Reserve Bank of Chicago, Chicago Fed National Activity Index: Three Month Moving Average [CFNAIMA3], retrieved from FRED, Federal Reserve Bank of St. Louis, March 23, 2020;
As of March 20, 2020 (incorporating data through March 13, 2020) the WLI was at 136.1 and the WLI, Gr. was at -4.4%.
A chart of the WLI,Gr., from the Advisor Perspectives’ ECRI update post of March 20, 2020:
Below is the latest chart, depicting the ADS Index from December 31, 2007 through March 14, 2020:
The Conference Board Leading (LEI), Coincident (CEI) Economic Indexes, and Lagging Economic Indicator (LAG):
As per the March 19, 2020 Conference Board press release, titled “The Conference Board Leading Economic Index (LEI) for the U.S. Increased Slightly in February” the LEI was at 112.1, the CEI was at 107.6, and the LAG was 109.1 in February.
An excerpt from the release:
“The U.S. LEI rose slightly in February, but it doesn’t reflect the impact of the COVID-19 pandemic which began to hit the U.S. economy in full by early March. The slight gain in February came only from half of the LEI components. In particular, the recovery in manufacturing, which looked promising until February, will now be short-lived because of the disruption in global supply chains and falling demand,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “Declines in stock prices, consumers’ outlook on economic conditions, manufacturing new orders, average workweek in manufacturing, and rising unemployment claims will begin to negatively impact the economy. As a result, the economy may already be entering into a period of contraction.”
Here is a chart of the LEI from the Advisor Perspectives’ Conference Board Leading Economic Index update of March 19, 2020:
I post various indicators and indices because I believe they should be carefully monitored. However, as those familiar with this site 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 2304.92 as this post is written