The Economic Index Foreshadows A Slowing Of The U.S. Economy Ahead
The Decision Analyst U.S. Economic Index stood at 114 in September 2019, an increase of 1 point from the previous month and yet a decrease of 2 points from September 2018. This 12-month decrease foreshadows a slowing of the U.S. economy heading into the fall of 2019 and the first half of 2020. The Economic Index tends to lead overall U.S. economic activity by 6 to 12 months. Below is the past-20-year history of the U.S. Economic Index.
“The inversion of the yield curve, rising tariffs and trade barriers, and disruption of labor markets caused by immigration crackdowns are all having negative effects on the U.S. economy. A greater near-term worry, perhaps, is the impact that negative “a recession is coming” news stories are having on consumer psychology. The recent declines in the Economic Index suggests that consumers are becoming increasingly aware that a recession is a growing possibility—and it’s likely that consumers will postpone some discretionary purchases in coming months if the negative drumbeats continue,” said Jerry W. Thomas, President/CEO of Decision Analyst. “The weakening economies of the European Union plus the softness in China’s economy are also exerting downward pressure on U.S. economy activity. Slow growth, no growth, or a recession appears to be our destiny in coming quarters,” said Thomas.
Only one Census Division increased in the past 12 months, the West South Central Census Division rose 2 points. The Pacific and the New England Census Divisions each declined 5 points, and the West North Central Division declined 1 point.
The following chart compares the U.S. Economic Index to Decision Analyst’s Economic Indices for other countries. In North America, all three countries saw declines in the past 12 months. In addition to the decline in the U.S., Mexico decreased 1 point, while Canada decreased 3 points. In South America, Brazil increased 6 points in the past 12 months, while Argentina increased 5 points. In Europe, France increased 4 points in the past 12 months and Italy increased 2 points. The other European countries experienced declines. The European and U.S. economies are increasingly at risk of recession. Some of the major countries tracked by Decision Analyst are shown below.
The Decision Analyst Economic Index is based on a monthly online survey of several thousand households balanced by gender, age, and geography. The scientific survey is conducted in the last 10 days of each month. The Economic Index is calculated from 9 different economic measurements using a sophisticated econometric model. The result is a snapshot of coming economic activity in each country surveyed, as seen through the eyes of representative consumers living in the respective countries.
Decision Analyst conducts its concurrent economic surveys each month in Argentina, Brazil, Canada, Chile, Colombia, France, Germany, India, Italy, Mexico, Peru, the Russian Federation, Spain, and the United States. Whenever the Decision Analyst Economic Index is greater than 110, it tends to signal an expanding economy. An Index value of 90 to 110 suggests a no-growth or slow-growth economy, and near or below 90 generally indicates economic contraction. These guidelines vary by country, however.
About Decision Analyst
Decision Analyst (www.decisionanalyst.com) is a global marketing research and analytical consulting firm specializing in strategy research, new product development, advertising testing, and advanced modeling for marketing decision optimization. For over 40 years, the firm has delivered competitive advantage to clients throughout the world in consumer-packaged goods, telecommunications, retail, technology, medical, and automotive industries.
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Click on the map above to open Decision Analyst's Interactive Map for the United States and its nine census divisions.
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