Posted by: stockscooter | March 5, 2012

Economic Recovery on the Horizon?

Where does the strength of our economy first show it’s leading tendencies?  Many think it’s in our employment figures.  Indeed, creating more jobs is important, however it has it’s weaknesses in predicting economic strength.  One weakness is whether or not that new job is being held down by a person receiving a higher salary than before.  If not, than that is a decrease to the economy.  So what is a good leading identifier of economic strength?  Consumption is the answer.   The chart below provided by Hussman Funds, reveals that employment had to be lagged by 5 months in order to fit the correlation between it and consumption.  Currently, consumption has turned down and at some point employment will follow–And so too will the markets.  Be careful out there!

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