Leading Indicators Down Sharply

Dec. 28, 2009 - PRLog -- The Consumer Metrics Institute has reported that its primary Consumer Leading Indicator (the 'Weighted Composite Index') had dropped 10.1% during the 34 days between November 7th and December 11th 2009. This downturn pushed the index into the lowest decile among its historical readings, and only 7% of its daily values since January 2005 have been lower. The index, which leads the S&P 500® by an average of about 140 days, reached its most recent cyclical high on August 13th, now more than 130 days ago, and has been declining since.

"Although the correction has been broadly observed within all the sectors that we track, the decline has been most strongly felt in our Housing and Retail Indexes," said Richard Davis, President of the Consumer Metrics Institute. "Both of these sectors are now experiencing year-over-year contraction in the neighborhood of 10%. Among our other sector indexes, the relatively positive ones have been the Automotive and Entertainment Indexes, both of which have shown substantial strength over the past week to ten days."

Mr. Davis cautioned that, contrary to the folklore surrounding this recession, Consumer interest in purchases of major durable goods and services was actually rebounding strongly a year ago after hitting a nadir during the first week of November 2008. "For that reason year-over-year comparisons are now being made against historically high Housing and Retail numbers from year-end 2008. The lesson to be taken from our data is that the economic recovery stimulus provided by those two sectors has been softening significantly."

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About the Consumer Metrics Institute:

The Consumer Metrics Institute publishes a set of indexes reflecting day-to-day changes in consumer interest towards major discretionary purchases. These indexes are updated several times per week and are available free of charge on the Consumer Leading Indicators web site: http://www.consumerindexes.com.