Data for several series among AIER’s primary leading indicators have posted mild increases during the latest month. However, these increases, including a roughly 30 percent increase in the stock market, have not lasted long enough to warrant an assertion of changes in any of the trends.

The percentage of primary leading indicators appraised as expanding rose only to 18 (two out of eleven) from 17 last month. The cyclical score, which is based on separate, purely mathematical analysis of the leaders, increased to 29 from 27 last month, with the uptick primarily attributable to the recent stock market rally. For all of AIER’s series, a score below 50 means a downturn is more likely than a recovery.

This gloomy assessment sounds contrary to the predictions of improvement in economic conditions often cited in the news. AIER’s methodology leads us to be cautious in our predictions. Recent increases in the base data in April (or March for some series) might end up signaling the starts of new trends. But at this time, it is too early to tell. We do not change our appraisals based on only one month of optimistic data.

The economy still faces considerable uncertainty on many fronts. It has not yet registered the fallout among workers, suppliers, and dealer from the bankruptcy of Chrysler or from the possible bankruptcy of GM. Real estate continues its severe slump. The banking system remains troubled. And the nation faces an enormous budget deficit, as well as unknown future policy steps the government might take to deal with current economic problems.

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