This is going to be a busy week for economic data, and maybe for the markets as well. Consumer confidence, FOMC minutes, the ISM, and the employment report will all be released over the next few days. Given that various economic indicators have been implying that the economy is heading towards recession, this fresh set of information will be closely watched. Special attention will probably be paid to the ISM report which was teetering around a level of 50 last month. Historically, readings below 50 have been consistent with periods of slowing economic growth.
Of course, any single data point means little by itself. What can be revealing are the trends across a variety of indicators that have historically shown significant correlations with the business cycle. When all those indicators trends in the right (or wrong) directions, economic conditions become far more predictable – though never with absolute certainty, of course. In any event, if consumer confidence, the employment situation, and business activity all deteriorate further, then I’ll be confident calling it what it is. Meanwhile, I’m doing what most shoppers seem to be these days – “just looking.”
Victor K. Lai, CFA
This blog is for informational purposes only. Nothing on this blog constitutes investment, tax, or legal advice. You should conduct proper due diligence and / or consult with professional advisers before taking any investment action.