Michigan Leading Economic Indicator, October 2009
The Grand Rapids Business Journal/e-forecasting.com Michigan Leading Economic Indicator, Michigan's early bird of economic activity, increased in October 2009 to a reading of 99.4, where 2000 is set equal to 100.
The private forecasting service said the composite Michigan index of state leading indicators, which is produced jointly with Crain’s Detroit Business, went up 1.1 percent in October after an increase of 0.9 percent in September. This is the fourth consecutive month for an increase in the growth rate, a good sign that the economy will soon shift and return to expansion.
Eight of the 10 components that make up Michigan's LEI had a positive contribution in October: Unemployment Claims, Weekly Hours in Manufacturing, Building Permits, Exports of Manufactures, Consumer Expectations (Regional), Stock Prices (National), Interest Rate Spread and Employment Barometer.
Two components had a negative contribution: New Orders (Detroit Business) and Productivity Barometer (Detroit Business).
Looking at its six-month growth rate, a signal of turning points, Michigan's Leading Indicator went up by an annual rate of 1.6 percent in October, after a decline of 1.2 percent in September. This is the first time the six-month growth rate has been positive since October 2007. Also, this compares to a long-term annual growth rate of 1.6 percent, the same as the annual growth rate of the state's overall economic activity.
Evangelos Simos is chief economist of the consulting and research firm e-forecasting.com.