February 6th, 2012
by Guest Author Dwaine van Vuuren, PowerStocks Investment Research
Econintersect: Everyone treats employment figures as co-incident indication of an economy’s status but a very useful leading economic indicator that deploys a wide range of labour market data is the Conference Board’s Employment Trends Index (ETI).
The figures were updated today and according to Gad Lavanon from the Conference Board:
“The Employment Trends Index has been improving rapidly for four straight months, suggesting somewhat more robust job growth is likely to continue in this quarter.”
Follow up:The ETI is one of the 9 components of our Composite SuperIndex and one of 4 leading indicators used by the SuperIndex. We deploy rate of change of the ETI for recession lead-signalling as shown below. The implied probability of recession is 0.1%. The system has an average lead of 6.5 months (5.5 months to the real-time observer) with a standard deviation of only 2 months in the 39 years since 1973. The ETI joins the Conference Board LEI in depicting low probability of recession.
Click on graph for larger image.
Authors note: Dwaine van Vuuren is CEO of PowerStocks Investment Research, a South African-based provider of investment research and specialist in recession forecasting/dating. If you would like to receive the next 4 weeks SuperIndex Recession Reports for free, just email us at firstname.lastname@example.org with FREE SUPERINDEX ECONINTERSECT in the subject line.
Sources and References:
- The Conference Board Employment Trends Index™ (ETI) (The Conference Board, 6 February 2012)
- US Recession: An Opposing View (Dwaine van Vuuren, Advisor Perspectives dshort.com, 3 January 2012)
- The New Conference Board LEI: First Look (Dwiane van Vuuren, GEI Analysis, 30 January 2012)