Thursday, June 02, 2005

ISM

Bill Cara: Stocks rally on hopes of Fed loosening, Wed., June 1, 2005, 11:45 AM
The consensus among economists ranged from 51.0 to 55.0, averaging 52.0 for May. The actual of 51.4 was down from that estimate, and down in consistent monthly steps from an index level of above 60 twelve months ago.

If an index level of 50 is a tipping point between economic expansion and contraction, then on a national level, the U.S. is falling perilously close to contraction. But the fact is that some of the regions of the country are already in economic contraction.

In these regions, net jobs are not increasing, but declining; net disposable income is not increasing, or increasing at a more modest rate, but in fact declining; and house prices are not increasing, and new home construction is not increasing. For a large part of America, things are not great.
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