Picture du Jour: US consumer holds back growth

By Prieur du Plessis, on March 12th, 2010 posted in: Economy, Investment

An interesting chart comes from the Consumer Metrics Institute (via Clusterstock – Chart of the Day) that constructs a US consumption index based on actual transactions data for a range of major discretionary purchases such as cars, houses, durable goods, and vacations.

Although the time series is rather short, the “Daily Growth Index” usually leads changes in US GDP (see chart below). Based on the historical relationship, the Index would seem to indicate slower GDP growth ahead. This concurs with a recent analysis of the US ISM non-manufacturing and ISM manufacturing surveys posted on the Investment Postcards site about ten days ago.

Source: Clusterstock – Chart of the Day, March 11, 2010.

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More on this topic (What's this?)

ECRI's WLI and Deficit Spending (Kirk's Market Thoughts, 4/30/12)

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GDP Growth Disappoints Comes In At 2.2% (Value Investing, 4/27/12)

Read more on ISM Manufacturing Index, US GDP Growth at Wikinvest

HKN

March 13, 2010 at 1:50 pm

You can compare a million curves and find a couple that, in retrospect, appear to be leading indicators for the past three years.

A better source would be The Conference Board, which publishes an index of leading business cycle indicators with a good long-term track record of predicting recessions.