Leading Indicator Update
The Institute for Trend Research recently reported a declining Leading Indicator for November, suggesting a possible slowing for U.S. industrial production in late 2013 (Figure 1). Additionally, the Purchasing Manager’s Index (PMI) fell to a new four-month low (Figure 2).
In terms of recession signs, the PMI is still showing that the economy will not drop into a recession in the first half of the New Year. However, the PMI has not had more than two consecutive monthly gains yet in 2012. The recent volatility is similar to patters that were witnessed in early 2006 and late 2007 (Figure 3).
Together, these signs could be another indication of industrial slowing in the second half of next year. It is still early, but another drop next month could be telling.