After another week of monitoring high frequency indicators, it's clear there is no steep downturn in economic activity or a panicking consumer. The table above shows the high frequency indicators we've been following, which provide the most up to date information about the economy. From industrial and trade indicators like steel production and rail car traffic, to measures of consumer activity like weekly chain store sales and hotel occupancy, all have improved from last year and remain stable from week to week. Initial claims have remained in the 420,000 range coming in at 423,000 in the past week, well within the range that claims have been in over the past three months. The bottom line is that this level of weekly jobless claims is nowhere near a recessionary level. Box office receipts were down slightly last week from year ago levels, but show no sign of overt weakness.
We have been following these high frequency indicators for more than two months, and it is obivous to us that, based on the data, there is no sign of a sharp downturn in the economy. Despite gloom and doom from many pundits and wild swings in equity and bond markets, the economy is doing fine, and will continue to do just fine in the months ahead.
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