As the economy begins to recover, service industries dominate employment growth.

The latest data indicate that the economy may be coming out of a recession. But the increase in production has not yet translated into growing employment.

This month, the percentage of AIER leading indicators expanding remained unchanged at 91 (10 out of 11 indicators with a discernible trend). The cyclical score of leaders, which is based on a separate, purely mathematical analysis of the indicators, increased from 63 to 66. Both of these measures, with their values above 50, indicate that an expansion is more likely than a contraction.

The new batch of data continues to show signs of a revival in economic activity. The most recent increase in new orders for core capital goods, which include nondefense, non-aircraft capital goods, prompted us to upgrade the appraisal of the series from probably to clearly expanding.