Michigan Leading Indicator increases

April 12, 2010
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The Grand Rapids Business Journal/e-forecasting.com Michigan Leading Economic Indicator, Michigan's early bird of economic activity, increased in February 2010 to a reading of 103.2, 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 Grand Rapids Business Journal, went up 0.5 percent in February after an increase of 1.1 percent in January.

Six of the 10 components that make up the indicator had a positive contribution in February: Unemployment Claims, Weekly Hours in Manufacturing, Building Permits, Exports of Manufactures, Consumer Expectations (Regional) and Interest Rate Spread.

Four had a negative contribution in February: New Orders, Stock Prices (National), Productivity Barometer and the Employment Barometer.

Looking at its six-month growth rate, a signal of turning points, Michigan's Leading Indicator went up by an annual rate of 8.8 percent in February, after an increase of 8.3 percent in January. There is a new peak for the six-month growth rate, finally surpassing the previous peak, which was reached over 15 years ago in June 1994 with a peak of 8.4 percent. This compares to a long-term annual growth rate of 1.4 percent, the same as the annual growth rate of the state's overall economic activity. 

Evangelos Otto Simos is chief economist of the consulting research firm e-forecasting.com.

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