Does The Market Indicate Economic Rebound?

Just because stocks have risen does that mean the economy has recovered?

No, but it appears to be bottoming out and hopefully, soon it will be on the rebound. There are several other indicators to consider when assessing the state of the economy.  The Conference Board’s index of leading indicators contains ten, and in August the index rose 0.6 percent.

Photo by chrischappelear, courtesy of flickr

Five of the ten indicators posted increases in August: supplier deliveries, stock prices, interest rate spreads, consumer expectations and building permits.

Three of the indicators offered negative results: jobless claims, capital goods orders and real money supply.

The remaining two indicators, consumer goods orders and the factory workweek, remained unchanged.

Indeed, the stock market has had an unusually positive September thus far.

The Dow has gained 3 percent, the Nasdaq has risen 6.4 percent and the S&P 500 has gained 4.3 percent.

The bottom line: The economy is showing some positive signs, the stock market being one of them.

Although it appears as if the economy will not get any worse, it has not recovered yet.