Doug Henwood >Must dissent here. The confidence numbers are a good leading indicator of the bizcycle. They generally bottom about 3 months ahead of the cyclical trough (and top out about 1-2 months ahead of the peak). And the confidence numbers themselves - at least the Conference Board's version - are composites based on consumer evaluations of incomes and the job market. The recent pickup could reverse, but if it doesn't, then it should be taken seriously.<
I'm glad that we are disagreeing about the least important part of my notes -- i.e., what the forecasters think. I must admit that I have very little respect for these folks, since they seem to be perennially optimistic, while moving in a herd, all predicting similar stuff. This is the mirror-image of the perpetually doom-saying leftist economists, except that the latter often disagree with each other on important issues and engage in intellectual debate, polemic, etc. Anyway, I had filtered out the prognostications of the forecasters that didn't make sense to me. The key thing is that this recession is different from all of the other ones in the US since WW2: while most or all of the other ones were primarily due to anti-inflationary monetary policies, this was was mostly due to the autonomous dynamics of the economy. So the precedent of history -- i.e., the meaning of putative leading indicators -- doesn't apply. As mentioned, one big & relevant difference is that consumers are deeper in debt than in previous downturns. Jim Devine
