Sunday, 7 August 2011

I Wonder?


According to this report, there's no real reason to worry about what lies ahead:

"Obama Urges Cabinet to Redouble Economic Efforts" (Associated Press)

[President Barack] Obama's spokesman discounted talk that the economy may be headed back into recession, despite recent concerns of economists.

Press Secretary Jay Carney said there is no question that economic growth and job creation have slowed over the past half year.

But, Carney told a White House briefing, "We do not believe that there is a threat of a double-dip recession."

The recession that began in December 2007 officially ended in summer 2009 and the economy has seen growth since then. However, that growth has slowed to a trickle in recent months.

Even with all of the recent difficulties, Carney said: "We believe the economy will continue to grow."

According to this blog post, there's good reason to worry about what lies about:

"Cause for Concern? Coincident/Lagging Continues to Fall" (Economic Musings)

A few months ago, I touched on the concept of how the coincident/lagging ratio can often provide a leading indicator into economic activity. In my May post I wrote:

“One of the theories behind this ratio is that when the expansion is nearing its final stages both sets of indicators will be rising, but the increase for the coincident will be slower than the lagging hence the ratio will fall.
Richard Yamarone notes in his book, The Trader's Guide to Key Economic Indicators, that this ratio has fallen before every recession since 1959.
An updated view of this ratio shows continued deterioration - all this despite the fact that leading indicators continue to rise. Add this to the list of concerns about a slowing economy.

Coincident to lagging August

Hmmm. I wonder which one I should take seriously?

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