Despite improvements in the labor market and a rise in industrial production, recordbreaking debt continues to hold back the recovery.

AIER’s primary leading indicators continue to suggest that a recovery is likely. The percentage of leaders expanding increased from 82 last month to 90 this month (nine out of ten indicators with a discernable trend). The
cyclical score of the leaders, which is based on a separate, purely mathematical analysis, increased from 57 last month to 62. For each of these measures, a value above 50 indicates that an expansion is more probable than a contraction.

The deterioration in the labor market may be coming to an end. Initial claims for state unemployment insurance, one of our leading indicators, decreased in November for the third straight month, signaling that fewer people are being laid off. The series, inverted for analysis, remains appraised as expanding. Another leader, the average workweek in manufacturing, increased for the third straight month. In November, it stood at 40.4 hours.