My Weekly Indicators post is up at Seeking Alpha.

The divergence between the near term vs. longer term forecast is increasing, and the risk that the forecast is too optimistic is asymmetrical, because for the economy, Trump’s chaotic tariff behavior cannot improve the situation, but can definitely cause harm.

 

Summary

• High frequency indicators can give us a nearly up-to-the-moment view of the economy.
• The metrics are divided into long leading, short leading, and coincident indicators.
• Lower long-term interest rates and improving real money supply have turned the long-term forecast more positive.
• But the short-term forecast has declined slightly again, and the impact of chaotically imposed tariffs may make the situation even worse.

Purpose

I look at the high frequency weekly indicators because while they can be very noisy, they provide a good nowcast of the economy and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. They also are an excellent way to "mark your beliefs to market." In general, I go in order of long leading indicators, then short leading indicators, then coincident indicators.

A Note on Methodology

Data is presented in a "just the facts, ma'am" format with a minimum of commentary so that bias is minimized.

Where relevant, I include 12-month highs and lows in the data in parentheses to the right. All data taken from St. Louis FRED unless otherwise linked.

A few items (e.g., Financial Conditions indexes, regional Fed indexes, stock prices, the yield curve) have their own metrics based on long-term studies of their behavior.

Where data is seasonally adjusted, generally it's scored positively if it's within the top 1/3 of that range, negative in the bottom 1/3, and neutral in between. Where it's not seasonally adjusted, and there are seasonal issues, waiting for the YoY change sign will lag the turning point. Thus I make use of a convention: Data is scored neutral if it's less than 1/2 as positive/negative as at its 12-month extreme.

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