Conference Board LEI for the U.S. declined in February

Conference Board ^ | 3/19/09 | Ken Goldstein

[Redmen4ever]

The Conference Board Leading Economic Index™ (LEI) for the U.S. decreased 0.4 percent, The Conference Board Coincident Economic Index™ (CEI) decreased 0.4 percent and The Conference Board Lagging Economic Index™ (LAG) decreased 0.4 percent in February.

The Conference Board LEI for the U.S. declined in February, following a slight increase in January. The monthly increase for December was revised to a small decline, while January's monthly increase was revised lower, due mainly to data revisions in manufacturers' new orders and real money supply. Between August 2008 and February 2009, the index fell 2.1 percent (a -4.1 percent annual rate), faster than the decline of 1.6 percent (a -3.1 percent annual rate) for the previous six months. In addition, the weaknesses among the leading indicators have remained widespread in recent months

[Redmen4ever]

We have never had a recovery without first having three months running of uptick in the index of leading indicators, and have always had a recovery with this signal. Usually, the start of the recovery comes a few motnhs after the signal, although this is only recognized yest several months later.

Today's release indicates that talk of the economy bottoming-out may be premature. We have at least nine more months of recession. The recovery now, will only start during the first quarter of next year at the earliest (and maybe later). Assuming the recovery does start during the first quarter of next year, the earliest it will be recognized will be the 2nd or even the 3rd quarter of next year.

By that time (the 2nd or 3rd quarter of next year), the prospect are, now, double-digit unemployment and rising inflation, to go along with massive new taxes and government programs, and burgeoning deficits.

With these conditions, I expect Obama to impose Nixon-like wage-and-price controls, if not FDR-like nationalization of industry, in a desparate attempt to preserve Democratic control of the Congress and his own chances of re-election in 2012.