ECONOMIC INDICATORS

Leading indicators supposedly show the direction the economy will move to- coincident confirms the current condition- and lagging supports the prior indicators. They are not prefect but are absolutely mandatory analysis for anything to do with investments.

PRIMARY LEADING INDICATORS

M-1 Money Supply

M2 Money Supply

Change in Sensitive Material Prices

New Orders for Consumer Goods

Contracts for Orders for Plant and Equipment

Index of New Housing Permits

Ration of Manufacturing and Trade Sales to Inventories

Vendor Performance

Index of Common Stock Prices (constant purchasing power)

Average Workweek in Manufacturing

Initial Claims for Unemployment Insurance

Change in Consumer Debt

PRIMARY ROUGHLY COINCIDENT INDICATORS

Nonagricultural Employment

Index of Industrial Production

Personal Income in Manufacturing

Manufacturing and Trade Sales

Civilan Employment to Population Ratio

Gross Domestic Product

PRIMARY LAGGING INDICATORS

Average Duration of Unemployment

Manufacturing and Trade Inventories

Commercial Loans

Ration of Consumer Debt to Personal Income

Change in Labor Cost Per Unity of Output, Manufacturing

Composite of Short Term Interest Rates

Labor Force Participation Rates 2000

                   France         Germany            U.S.

	1967	1998	1967	1998	1967	1998
Total	67.6%	67.4	69.2	70.8	69.2	77.4
Women	47.8	60.8	47.5	62.6	47.8	70.7
Men	87.7	74.1	93.1	76.7	91.2	84.2
20-24	85.8	52.9	86.2	72	85.4	82.0
25- 54	95.8	94.5	96.5	93.2	95.5	91.8
60-64	63.0	15.3	77.7	29.9	76.9	55.4

The reduction of older men in the labor force is most pronounced in Europe where the retirement age was reduced during the 80's. France went from a retirement age of 65 to 60. Pension funds also provide generous benefits while also onerously taxing those pensioners that continue to work.

Overall, you can see that the U.S. simply has more workers at almost every age as of 1998.

OIL (Dick LePre 2000) A sustained increase of $10 per barrel in the price of crude reduces real GDP growth by approximately 3/4 of a percentage point in the year following the increase. In 1975 the economy used 1400 BTUs of petroleum to produce a dollar's worth of GDP. Now, it takes less than 700 BTUs to produce one dollar's worth of GDP today. The U.S. is more energy-efficient than it was 25 years ago. In 1980 oil accounted for 6% of all of the personal expenditures for Americans. Even with the present high energy prices oil accounts for 2.7% of the present personal expenditures of Americans. In most parts of the world, oil can be taken out of the ground at a cost of under $15/bbl. There were 1,310 oil rigs operating in the US in the last week of September. A year ago, there were 841. More oil can be taken out of the ground in Mexico and the North Sea. In the long run there is still large untapped capacity in China. The solution to the present problem is not tapping the SPR, it is extracting more oil.

How the Euro works: (2002) You've read about, it's the rage in all the news! Find out now about what makes this new currently really tick.

Has Monetary Policy Become Less Powerful? (2002)

Monetary Policy: (2002) Anthony Santomero, president, Fed Board of Philadelphia- I believe market expectations are rational in the long run. But in the short run, the marketplace is beset by waves of optimism and pessimism that move expectations irrationally. We should no lose sight of that fact that market participants are human beings subject to emotions that can cause them to overact and underreact .

And, "monetary policy is a blunt instrument with an impact subject to long and variable lags. .  "....while there seems to be a broader recognition that monetary policy is a blunt instrument, there also seems to be a more strident call for the FED to use it with surgical precision. Such expectations are not realistic. The danger I see in such unrealistic expectations is that not meeting them- which is inevitable- could unnecessarily traumatize financial markets and undermine broader public confidence, thereby unnecessarily debilitating the performance of the economy.

We cannot eliminate the business cycle entirely What we can do is mute the impact of large and persistent negative shocks to the economy."

Rates: (2003) A 1-percentage-point increase in the funds rate is estimated to reduce quarterly output growth over the following two years by about   1.2 percentage points. The second row shows that a 1- percentage-point decline in the funds rate is estimated to increase quarterly output growth over the following two years by about 0.5 percentage points. Thus, the short-run response of output to increases in the funds rate is estimated to be over twice as large as the response to decreases in the funds rate.