Recent changes are not enough to suggest a double-dip recession.

The percentage of leading indicators expanding remains at 100 this month, and the cyclical score of the leaders, a purely mathematical measure, increased to 91 from last month’s 88. The percentage of coincident indicators expanding also remains at 100, and for the first time since November 2009, the percentage of lagging indicators expanding rose above zero.

Despite the improvement in the scores, there were few positive signs among the most recent data for the primary leading indicators of business conditions. However, most of the current declines in the leaders have been small compared to their long-term upward trend. Most likely, the declines represent the slowness of this recovery rather than a danger to it.

The recovery hit its biggest bump this month in the housing sector. New housing permits has fallen more than 16 percent since March and has reached a seven-month low. This decrease led us to downgrade this series’ cyclical
status from probably expanding to indeterminate. In addition to the decline in permits, sales of new homes fell by almost 33 percent in May to an annual rate of 300,000, a record low. This is an indication of the extent to which the housing market had been bolstered by the federal home buyer tax credit, which expired in April.