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Discussion: (6 comments)

  1. Jon Murphy

    Given the USLI leads the US economy (as measured by US Industrial Production) by 9-12 months, this indicates US economic growth into late 2013.

  2. morganovich

    looks to me like the whole rise and then some was driven by financial makers like bond spreads and equity prices which, in turn, are being heavily manipulated by the fed.

    i’m not terribly convinced that this reading is meaningful.

    end qe and this index would fall apart.

  3. The gradual, but ongoing increases in the leading index over the last year point to a continuation of slow, but steady growth in the “plow horse economy”‘…

    How much of a part does the consumer play in that increasing growth?

    There may be less discretionary income on the part of the consumers to help dirve the growth…

    1. Jon Murphy

      The consumer has been a major factor in keeping this recovery going. Retail Sales (excluding autos) are at record highs, both in real (inflation adjusted) and nominal terms. The 2.8% annual growth rate isn’t spectacular, but it’s not terrible either.

      I’d like to point out, Juandos, that the USLI is just sending messages about 2013. The tax to which you refer goes into effect in 2014. It will be one of the factors to tip the economy into a mild recession in 2014, but obviously won’t have any effect on 2013.

      The other consumer-borne tax is the payroll tax hike (before I continue, can I just say how I love how it’s called the American Tax Relief Act of 2012? I mean, it was passed in 2013 and it raised taxes. That is a beautiful piece of propaganda right there). Now, the payroll tax hike was 2%. For the average American, that works out to about $40 less per week in their paycheck. That’s not a lot. The effects of the hike will be cumulative rather than immediate (as was clear in January’s Retail Sales numbers. Not a bad month at all). We won’t really start to see major slowing in Retail Sales until late this year.

      1. The consumer has been a major factor in keeping this recovery going. Retail Sales (excluding autos) are at record highs, both in real (inflation adjusted) and nominal terms. The 2.8% annual growth rate isn’t spectacular, but it’s not terrible either.

        Not terrible. Really? If the Fed has to keep exploding its balance sheet and buy tens of billions of mortgage paper each month and Fed governors admit to manipulating the markets in public speeches what makes you sure that any of the ‘recovery’ is sustainable? I see Sears, Radio Shack, Wal-Mart, Best Buy, K-Mart, and other retailers close stores across the nation because their sales are falling as Main Street is having trouble. The actions that are taken are mainly geared towards helping Wal Street. I suspect that the Fed’s experiment will end badly. And the economy will suffer for it.

      2. The tax to which you refer goes into effect in 2014“…

        Ahhh jon that’s not quite true…

        Time magazine Dec. 7, ’12: 5 New Obamacare Taxes Coming in 2013

        Forbes Dec. 25, ’12: In 2013, Millions Of Americans Face Obamacare Tax Hikes

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