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.”
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 [email protected] 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)