{"id":3035,"date":"2010-07-22T14:52:32","date_gmt":"2010-07-22T14:52:32","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=3035"},"modified":"2025-03-27T15:49:05","modified_gmt":"2025-03-27T15:49:05","slug":"us-leading-index-weaker-than-it-looks","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=3035","title":{"rendered":"US leading index weaker than it looks"},"content":{"rendered":"<p>The US Conference Board index of leading indicators fell by a smaller-than-expected 0.2% in June and is still up by 2.6% over the last six months, suggesting a solid near-term economic outlook.<\/p>\n<p>The bulk of the recent gain, however, is due to the component measuring the slope of the yield curve &ndash; the gap between the 10-year Treasury yield and the fed funds rate. This component has been contributing 0.3-0.4 percentage points to the monthly change in the index.<\/p>\n<p>A positive yield curve slope is less likely to signal economic strength when short-term interest rates are unusually low. The US economy suffered a recession in 1937-38 when the yield curve was only slightly less steep than currently &ndash; see previous <a href=\"http:\/\/www.moneymovesmarkets.com\/journal\/2010\/7\/13\/positively-sloped-us-yield-curve-doesnt-preclude-double-dip.html\">post<\/a>.<\/p>\n<p>A modified leading index excluding the yield curve rose by only 0.4% in the six months to June &ndash; see chart &ndash; and has fallen by 0.9% over the last three months.<\/p>\n<p>The view here remains that a &#8220;double dip&#8221; will be avoided as long as real narrow money continues to expand &ndash; it rose solidly in June &ndash; and the 10-year yield remains above 2.5%. Economic data, however, may continue to disappoint over the next few months.\ufeff<\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/graphs\/us-conference220710.gif?__SQUARESPACE_CACHEVERSION=1279810855386\" alt=\"\" \/><\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US Conference Board index of leading indicators fell by a smaller-than-expected 0.2% in June and is still up by 2.6% over the last six months, suggesting a solid near-term economic outlook. The bulk of the recent gain, however, is due to the component measuring the slope of the yield curve &ndash; the gap between [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-3035","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3035","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3035"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3035\/revisions"}],"predecessor-version":[{"id":5344,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/3035\/revisions\/5344"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3035"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3035"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3035"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}