Economics Trifecta: Leading Indicators and Unemployment Look Up

(MoneyWatch)  Unlike the conflicting signals we have seen for so long in the economic news, June 18 gave us three clear positive signs on important statistics. First, The Conference Board's release of the Index of Leading Economic Indicators (LEI) jumped to 54.9, up from about 40 in April. (The normal, baseline 100 value for the index dates back to 1985, if you remember what things were like back then.)

"This is the best back-to-back performance of the index since the November -December 2001 period," writes Asha Bangalore, an economist with Northern Trust's Global Economics Research team, in Chicago. From the LEI, she also calls the bottom of the recession at first quarter 2009, with the lowest point in March. See the graph below (all graphs come from Northern Trust):


The upturn (the red line) doesn't look like much in the context of the 50-year graph, but the LEI has improved for three months in a row. Seven components of the index were positive, while three held out as negative -- initial jobless claims, the length of the manufacturing workweek, and orders for consumer goods.

First-time filings for unemployment insurance were 608,000 for the week ended June 13. That's as many people as live in Milwaukee, but the trend is coming down, as measured by the four-week moving average of new claims:


Not only have new filings slowed: continuing claims for unemployment insurance, by people that have been out of work for a while already, turned down last week. Continuing claims dropped by 148 thousand, to 6.7 million. Notice the tick down in the blue line at the top of the chart:


Last, Bloomberg notes that manufacturing shows signs of picking up:

Pittsburgh-based U.S. Steel Corp., the largest U.S. steelmaker by sales, is recalling nearly 800 laid-off workers to restart coke production in the Canadian province of Ontario and a blast furnace in Illinois, union spokesmen Dave Dowling and Rolf Gerstenberger said in separate interviews this week.

What I know about steelmaking could fit in a thimble, but I think coke is some sort of processed coal they use to melt the stuff in blast furnaces, so Big Steel may be anticipating that things are picking up.

Even so, the recovery will come one small step at a time. Per Bloomberg:

"The recession is losing steam," Ken Goldstein, an economist at The Conference Board, said in a statement. "If these trends continue, expect a slow recovery beginning before the end of the year. However, employment will take longer to turn around."