Latest / Markets with Megan: A Quick Financial Markets Update / Is a Recession Around the Corner? Analyzing Key Data | Episode 157 | 07-18-24
Transcript
- 0:00Megan Horneman: This is one of my favorite economic reports.
- 0:02Megan Horneman: It's the leading indicator index and it comes out once a month and we got that this morning.
- 0:08Megan Horneman: It is Thursday, july 18th, and the reason why I like this index is because it takes all of those leading indicators for the economic activity and bunches them all together and it gives you one basically index reading.
- 0:22Megan Horneman: This index has been negative on a month-over-month basis for 27 out of the past 28 months and typically when you have it this consistently negative, it also coincides with the recession.
- 0:34Megan Horneman: There's been some people, some economists, that aren't looking too much into this as being a pure recession indicator any longer, because it is more goods oriented instead of services, and we know that the service sector of the economy has been what's keeping us afloat.
- 0:50Megan Horneman: But let's dig into some of the data that came into this report and why it was negative.
- 0:57Megan Horneman: So the biggest detractors from this, which kept the index negative, again from an ISM new orders, so that's goods orders.
- 1:03Megan Horneman: They're deeply negative.
- 1:05Megan Horneman: Jobless claims have started to tick up recently.
- 1:08Megan Horneman: So that's actually detracting from this index where it wasn't for a very long time.
- 1:13Megan Horneman: The interest rate spread we know that's the yield curve inversion.
- 1:17Megan Horneman: That's a negative.
- 1:18Megan Horneman: And then we've had weakness in consumer sentiment and that actually pulled this index negative.
- 1:23Megan Horneman: The positive contributions were stock prices and building permits.
- 1:27Megan Horneman: So those are the big ones that contributed positively to this index but, as we know, these other ones outweighed it and we've got another negative month from a leading indicator index.
- 1:39Megan Horneman: Not that surprising to us, because we do know that some of these things have been soft.
- 1:44Megan Horneman: That's all we have for today from an economic standpoint.
- 1:47Megan Horneman: If you like what you heard, please share the podcast like it.
- 1:51Megan Horneman: Follow us here at With Markets with Megan, and if you'd like to see additional podcasts, you can go to verdence.
- 1:56Megan Horneman: com/ podcasts.
- 1:58Megan Horneman: Thank you,