More plans to build homes, higher stock prices and fewer people filing first-time claims for jobless aid sent a private-sector forecast of U.S. economic activity higher than expected in June.Now I am suspicious of what this is an indicator of, and I am always suspicious with I see an AP news report with a byline by Nedra Pickler who has done some character assassination and misleading reports in the past and has earned a reputation of a reporter with a right-wing bias rather than of a reporter who tries to report as accurately and neutrally as possible.
It was the third straight monthly increase for the New York-based Conference Board's index of leading economic indicators, and another sign pointing toward the recession ending later this year.
Besides the suspicious nature of reporter herself, there is a question regarding the nature of the report itself. While these indicators may predict that the recession is nearing the end, they may also be very early and unreliable indicators. They may not indicate that the economy itself is beginning to recover on its own. They may be merely indicators that the stimulus funds are building up steam and becoming more effective.
How's that? Well, they may not yet be indicators that the economy is trying to regenerate itself. They may be indicators that the economy is sort of in the mode of a gasoline engine that coughs and sputters, then dies again when it has problems and is trying to start. But while I am suspicious of reading much positive into these indicators, at the same time they are still the best news out of the economy in well over a year. Again back to the metaphor of the gasoline engine that is trying to start but can't yet do so, that is a real indicator that the gasoline engine does not have something that totally prevents it from starting.
To again shift metaphors, these may not be indicators of a true dawn. They may instead be little more than indicators that resemble the false dawn that sometimes is noticed early on a cloudy day as the sun's rays are reflected to the ground before the sun itself actually has risen. So I find it guardedly good news.The time is too early to believe that the economy is actually coming back.