Is the economy slowing or isn’t it? As always, there are competing views and conflicting data. That doesn’t stop some from making predictions, including Lakshman Achuthan, managing director of the Economic Cycle Research Institute, who advised in an interview with CS last week that the first-quarter bounce would give way to something less impressive in the second half of this year.
Adding support for Achuthan’s outlook is yesterday’s update on the Conference Board’s leading index, which posted a slight decline last month. That comes after a larger drop in February. But even this downward bias of late, which implies slower growth in the months ahead, isn’t quite the negative it appears to be.
“Despite the weakness in the leading index in February and March,” the Conference Board said in a press release yesterday, “its six month growth rate picked up to an average of 3.2% annual rate in the first quarter, up from an average growth rate of 2.7% in the fourth quarter, which was higher than its average growth of 1.8% in 2005.” In addition, five of the ten indicators that make up the leading index increased in March.
Ok, so is the economic glass half full or half empty? One could make a case for either, although today’s release of survey results from the National Association of Business Economists leans toward the glass-is-half-full view. “Results of the April NABE industry survey suggests continued economic growth but with somewhat greater price pressures,” says Ken Simonson, chief economist, Associated General Contractors of America, in a press release accompanying the survey, which reflects the views of 116 economists who are NABE members.