Focuses statistics


So what are we to believe?

Once again, I'm not inclined to look for malicious intent in the actions of the U.S. statistical agencies, but these statistics makes ambiguous to find more accurate methods of analysis of the economic situation. In macroeconomic analysis, I usually pay more attention indicators, calculated by independent economic institutions primarily on the basis of surveys of economic actors. In this sense, the best method of identifying the business processes and the analysis of their dynamics seem to me of business surveys and calculated based on these indexes PMI.

PMI index for the industrial sector in the U.S. was negative growth (below 50%) in August 2000, however, according to the econometric model, the region 46-50% is more of a region of zero GDP growth. However, levels of 42-44%, which was the PMI index in the I half of 2001, has left no doubt that the U.S. economy is recession (officially it was confirmed only in July this year, after the revision of the official GDP data).

In addition to the index PMI, adequate signals, wearing, which is important, leading character, give indicators such as consumer confidence index, as calculated by independent economic institutions based on consumer surveys. But here is the problem of the analysis is that the relationship between consumer sentiment and spending levels, which determine the dynamics of GDP, is not always straightforward. Extremely useful business climate index (the most famous - German IFO). The index of leading indicators (leading index) is also very interesting analysis tool (I use it as a priority), but we must remember that it is built on the basis of official statistics, and therefore requires a more critical approach. However, a review of forecast indicators - is a big topic, do not fit into the scope of this article, which bears only intended to identify the problem.

Consumer spending

It is interesting to assess the prospects for the U.S. economy at the end of the year. This is all the more urgent that the matter current predictions the most respected institutions today are diametrically opposed - from recession to accelerate growth.

Let us return to the analysis of the results of II quarter. Here are a few unique features. The rate of growth in consumer spending has slowed down, was minimal in the last three quarters - 1.9%. The main threats to domestic demand - inflation and unemployment. The latter depends now on maximum annual levels (5.9%) and suggests serious concerns. At the same time, inflation is under control yet, and low interest rates offset the negative impact of the situation on the labor market.

If, in response to a possible second half of a new leap in unemployment the Fed did cut rates, consumer demand will be maintained, at least temporarily, and a deep recession may be avoided. Saving the annual growth rate of consumer spending at 3% is now seen as the most optimistic option for the U.S. economy. If consumer demand will be weaker, then the recession could be severe, because of hopes for the corporate sector almost none.