The New Economic Indicators
Want to know When the economy will improve? You can rely on the usual economic forecasts or look to other more offbeat indicators, such as sales figures at key retailers or new public-opinion polls.
The traditional bellwether for this type of forecasting is the index of leading U.S. economic indicators--an amalgam of trends derived from 10 statistics, including manufacturers' orders, supplier deliveries, unemployment claims, stock prices and consumer expectations. But here's a shortcut: Just look at Wal-Mart, Starbucks and FedEx.
As the economy worsens, it appears more families are seeking goods at the low-price leader's cavernous stores: Wal-Mart sales have risen nearly every month since the economy began floundering last fall. On the flip side, U.S. sales at upscale latte purveyor Starbucks have steadily declined along with FedEx's overnight package volume.Another way to take the economy's pulse is to watch the betting on the busy Intrade Prediction Markets, where $120 million changed hands during the U.S. presidential race, showing Barack Obama with a substantial lead from early on. At Intrade, investors buy contracts that essentially bet on whether an event will occur. The contract pays $100 if the prediction turns out to be true, zero if it doesn't. Last fall, contracts on whether the U.S. economy would be in a recession in 2009 were selling for $90 a share on Intrade; in other words, investors considered it very likely.
But a new daily opinion poll offered a glimmer of hope for economic recovery. In January, the Gallup-Healthways Well-Being Index began surveying a demographic cross section of 1,000 Americans each day, asking them how much they are worrying. By mid-November, the index started to show positive trends with more people saying they felt mostly happy and not stressed.
Is Idaho the next Silicon Valley?
By Dennis Romero
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