Posted on 09/07/2001 2:12:43 PM PDT by lasereye
Commentary: Leading indicators suggest worst may be over</font size></font color> NEW YORK (CBS.MW) -- If you want to see where you are driving, you look out the windshield, not the rear-view mirror. And if you want to forecast where the economy is headed, you must examine those statistics that lead economic activity, rather than those that trail behind. Unemployment is a case in point. It's not a leading indicator, nor is it considered a coincident indicator. Rather, it is a lagging indicator -- and, at that, only the average duration of joblessness. As for employment, it's considered a coincident indicator -- that is, it moves with the economy. So it only tells you the state of the labor market in the latest month -- not where it's going. The forward-looking indicator when it comes to the labor situation is first-time claims for unemployment insurance. This one, part of the Conference Board's 10 leading economic indicators, is telling us that the worst may be over when it comes to people losing their jobs. See latest story on the leading indicators. The four-week moving average of initial claims for jobless benefits peaked for this cycle at about 430,000, just before the middle of the year. On a monthly basis, June was the high month, with 417,000 first-time claimants. Since then, claims have retreated. July's total fell 3 percent from June, while August's claimants were almost 4 percent below July's. This averages out to a decline for the third quarter to date at an annual rate of fewer than 8 percent. Is there a statistic that leads the leader, so to speak, when it comes to unemployment? To some degree, there is -- layoff announcements. See our list of this year's cuts. To be sure, these announcements are not actual firings. As my CBS.MarketWatch.com colleague Rex Nutting said the other day, companies often announce a goal of job reductions for the next few months or even years, with many of the cuts in question accomplished through normal attrition. Having said this, it should be noted that August's announcements fell 32 percent from July's record pace, according to the latest Challenger, Gray & Christmas monthly survey. One month does not make a trend, of course, but it is another hopeful sign. Maybe that's why consumer expectations, another of the Conference Board's leading indicators, are improving. The board's leading indicator index, by the way, has risen for four months in a row. Besides the push from fewer jobless claims and rising expectations, help has come from an increase in the money supply, the spread between short- and long-term interest rates, and average weekly hours. Does all this mean we are set to roar ahead? No, but it does suggest that the worst of the decline may be over. Dr. Irwin Kellner is chief economist for CBS.MarketWatch.com and the Weller professor of economics at Hofstra University.
Could not negative reporting by the press cause a market "CRASH"?
Does it seem like we didn't learn our lesson that the press always sees the good with a Demo pres and can only whimper like crybabies when the GOP is in office?
I mean this is the last place I would think I would have to remind people of the main things we should have learned during the 'Toon administration: THE MEDIA IS BIASED!
When the sellers are gone, the sidelines money can come in ($4 billion) and create a short squeeze. Tuesday could be the biggest up day in market history.
Yes. It's no secret that the mostly liberal media picks up Democrat slanted propaganda and reports it as news.
When I heard we had the hightest unemployment in 4 years, I wondered why I couldn't recall the press reporting how terrible it was 4 years ago, under Clinton.
We also saw this with the arsenic in drinking water nonsense, even though the standard under Bush was exactly same as under Clinton, and all Bush did was delay adopting stricter standards, which is exactly what Clinton did for his eight years in office.
But we didn't see the Dems or the liberal media sounding the alarm about how Clinton was poisoning us all those years, did we?
The hypocrisy is astounding.
Remember Bush's statement on our commitment to defend Taiwan? And the Democrat and media hysteria on how Bush was supposedly "changing foreign policy" and people ranting about how GW was going to get us into a war with China etc. etc?
When the facts came out that Bush had not changed a thing but was simply stating outright U.S. policy consistant with the Taiwan Relations Act passed by Congress, there was very little mention of that fact in the liberal media.
Nor do I recall the media going ballistic over Bill Clinton sending an aircraft carrier group into the Taiwan straits during elections there to counter threats from China in the largest show of force since the 1950's.
But GW's simple truthful statement was cause for hysteria. How ridiculous.
Another example would be Bush's rejection of the Kyoto treaty on global warming.
The Dems and the liberal media ranted about Bush the anti-environmental polluter was alienating us from the rest of the world etc. etc.
However when these same Democrats voted for a Senate resolution which opposed signing Kyoto basically for the same reasons Bush rejected it, we heard no such outcries. The fact is not only did this resolution pass 95-0, but it was sponsored by a Democrat, Sen. Byrd.
The disingenuous and bogus criticisms against Bush over this fit the MO of the liberal media and the Dem leadership.
A recent example is reporting on the Bush budget and Social Security surplus. Quoting Cal Thomas;(August 31, 2001, Voodoo economics II)
"Every year between 1983 and 1998, according to the CBO, money designated for Social Security was spent on other government programs, leaving a deficit. Senate Budget Committee Chairman Kent Conrad (D-N.D.) and other leading Democrats did not oppose this practice. Now we're supposed to believe House Minority Leader Dick Gephardt (D-MO), who claims the need to raid Social Security again is "a failure of the president's budget."
Does anybody recall the liberal media sounding the alarm all these years about how these Democrats were "threatening Social Secutity"?
Yet with the second highest surplus in history we now see the media picking up the Democrat propaganda about how Bush's tax cut is robbing Social Security creating a huge fiscal crisis.
Incredible.
The liberal media stands for the same things as the Democratic propaganda machine....including campaigns of misinformation and lies, fearmongering and smear tactics which clearly depend on public ignorance to succeed.
Thank God the internet and cable TV have given us more choices! Our greatest weapon is the truth.
"It has been a mystery to those of us who have tracked the surge of weekly unemployment claims as to why the unemployment rate was stuck at 4.5 percent since April. If the unemployment rate had been going up each month as it 'should have,' it would have already been 4.9 percent. So in that sense, this report does not change the analytical landscape as much as it does the psychological and political landscape."
I've made money off stocks since before Microsoft went public and avoided this last correction, but nobody else seems to notice what is happening here.
So I guess I'm not the only one that sees this.
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