Regional Surveys, LEI show Growth Slowing

Michael Panzner draws our attention to the Fed’s Regional surveys — which have been showing signs of ongoing weakness.

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Panzner observes:

"This week two out of three regional surveys of economic activity
flashed early warning signs that U.S. economic growth may be poised to

On Monday, the Empire (New York) Federal Reserve Survey declined
sharply, coming in at a much lower-than-expected -11.1. Today, the
Philadelphia Fed Factory Index also fell, again surprising the market
with a near two-year low  reading of 7.3.

A quick read of the relationship between year-on-year growth in U.S.
Gross Domestic Product and those two surveys (plus the Chicago
Purchasing Managers Index, due out on May 31) suggests these regional
surveys may be worth paying especially close attention to."

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What's been said:

Discussions found on the web:
  1. james commented on May 19

    barry, i knocked your 10% down, 30% up, year forecast when you first posted it. let me emphatically state a first half “mae culpa”. good news for the rest of the year, and your forecast – i still think sir alan will KILL the cyclicals.

  2. spencer commented on May 20

    One of the best leading indicators is productivity and it is signalling a very weak second half.

  3. anne commented on May 20

    Agreed, Spencer.

  4. anne commented on May 20

    A question:

    What do these numbers mean? The Vanguard REIT Stock Index has a price earning ratio of 38.8, a return on equity of 9.1, and an earnings growth rate of -5.5%. These numbers make absolutely no sense to me. What am I missing about valuation?

    There seems to be a speculative climate for homes in selected American regions, but I wonder if that extends to commercial real estate as well so I thought to use the REIT Index as a gauge. The earnings growth rate extends over 3 years and is heavily negative at -5.5%. So REIT earning have been slowing; actually the earning growth rate has been negative for more than 4 years, but REITs gain in price. How curious.

  5. idook commented on May 20

    anne: maybe lots of small investor after the magic words “Real Estate”, but looking no further? Just guessing… would small investors make a difference?

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