The June Leading Economic Indicators dropped 0.3% versus expectations of a 0.1% drop. This marks the 2nd month in 3 that the indicators have dropped. This is a concerning trend as the leading indicators can be one of the best indicators of future economic growth.
Consumer expectations and manufacturing new orders remain the biggest problems with gains in the financial and labor components leading the way.
From the chart in the link, the leading indicators remain significantly below the peak at the end of 2005. The current is just over 95 after bottoming out around 80 at the end of 2008. The progress has been substantial, but the index has a long way to go in order to reach the pre-recession levels around 108.
The July report will be key to see if the indicators have truly stalled out. Consumer expectations remain the one component that doesn't appear to be accurately valuing the future. Expectations just aren't as accurate as in the past with consumers in a constant bad mood.
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