AIER’s primary leading indicators of business-cycle conditions continue to point to a recession with no signs of a turnaround. The percentage of primary leading indicators appraised as expanding decreased to 20 this month, down from 30 last month. A score below 50 indicates that a continued contraction is likely.

The only two primary leading indicators appraised as expanding—the M1 money supply and the yield curve index—reflect the government’s extremely expansionary monetary policy.  There is no evidence that the policy has had any influence on the broader economy.

The AIER cyclical score, which is based on a purely mathematical analysis of the leading indicators, decreased from 37 last month to 33 this month. As with the percentage of leaders expanding, a number below 50 indicates a downturn is likely to continue.

Not one of the six roughly coincident indicators is appraised as expanding this month. The National Bureau of Economic Research announced recently that a recession started in December 2007. The Bureau of Economic Analysis confirmed that the Gross Domestic Product fell at an annual rate of 0.5 percent in the third quarter.

Read a general description of our indicators and methods of analysis.

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