We have seen how the Conference Board publishes forecasts about the economy (6-9 months in the future) based on current figures on average workweek (in manufacturing), initial unemployment claims, new orders for consumer goods, vendor performance, plant and equipment orders, building permits, change in unfilled durable orders, sensitive material prices, stock prices (S&P 500), real M2 and index of consumer expectations [source: http://pages.stern.nyu.edu/~nroubini/bci/indexleadingeconomicind.htm]
While these reports are usually only available by pay, assumptions about the economy can be made by looking at this figures ourselves which is why I chose this article to discuss. This article notes that although there was a 4.2 percent rise in the durable goods order in January, it has fallen by 2.8% in February which means that investments are being slowed down and that the producers in the market are not that confident. Companies like Boeing faced a huge drop in orders (27.1%) and demand for non-defense capital goods fell by 1.8%. This added on with the fact that the number of people filing for unemployment benefits has grown (without a rise in job application numbers) means that the rate of job finding could potentially get lower than the rate of job separation in the future if the economy keeps slowing down.
As for now, it seems as if the economy is headed towards a possible decrease in activity in the future.
I'm not entirely sure if these predictions can be made at this juncture, considering that a lot of these investment statistics could change if consumer demand was significantly high enough to boost some economic activity.
ReplyDeleteFor instance - with cheaper oil prices comes higher demand for travels (since tickets might potentially cheaper for consumers), which could mean a rise in investment for companies like Boeing.