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 May 2020 Chicago Fed National Activity Index (CFNAI) updated as of May 26, 2020:
The CFNAI, with current reading of -16.74:
source: Federal Reserve Bank of Chicago, Chicago Fed National Activity Index [CFNAI], retrieved from FRED, Federal Reserve Bank of St. Louis, May 26, 2020;
https://fred.stlouisfed.org/series/CFNAI
The CFNAI-MA3, with current reading of -7.72:
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, May 26, 2020;
https://fred.stlouisfed.org/series/CFNAIMA3
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The ECRI WLI (Weekly Leading Index):
As of May 22, 2020 (incorporating data through May 15, 2020) the WLI was at 122.7 and the WLI, Gr. was at -28.8%.
A chart of the WLI,Gr., from the Advisor Perspectives’ ECRI update post of May 22, 2020:
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The Aruoba-Diebold-Scotti Business Conditions (ADS) Index:
Below is the latest chart, depicting the ADS Index from November 1, 2019 through May 16, 2020:
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The Conference Board Leading (LEI), Coincident (CEI) Economic Indexes, and Lagging Economic Indicator (LAG):
As per the May 21, 2020 Conference Board press release, titled “The Conference Board Leading Economic Index (LEI) for the U.S. Declined in April” the LEI was at 98.8, the CEI was at 96.6, and the LAG was 115.3 in April.
An excerpt from the release:
“In April, the US LEI continued on a downward trajectory, after posting the largest decline in its 60-year history in March,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “The erosion has been very widespread, except for stock prices and the interest rate spread which partially reflect the rapid and large response of the Federal Reserve to offset the pandemic’s impact and support financial conditions. The sharp declines in the LEI and CEI suggest that the US economy is now in recession territory.”
“Business conditions may recover for some sectors and industries over the next few months,” added Bart van Ark, Chief Economist at The Conference Board, “But, the breadth and depth of the decline in the LEI suggests that an imminent re-opening of some sectors does not imply a fast rebound for the economy at large.”
Here is a chart of the LEI from the Advisor Perspectives’ Conference Board Leading Economic Index update of May 21, 2020:
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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.
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 3011.51 as this post is written