Outlook For US Economy Still Underwater

The Conference Board’s composite of forward looking economic indicators is once again looking for the world’s largest economy to contract through the second half. The report’s June reading crossed the wires with a negative 0.1 percent reading - indicating a negative outlook for growth over the coming three to six months. Adding to the disappointment from the deata, the previous month’s original positive reading was revised down to negative 0.2 percent. With these two contractions, nine of the past 12 months have failed to see growth for the US. These dour readings are far from surprising however considering the oppressive heights in energy and food prices, the plunge in consumer confidence and rise in unemployment rate among other factors. Such concerns were clearly reflected in the indicator’s breakdown. Consumer expectations fell for the fifth consecutive month, jobless claims deteriorated and orders tappered off. The greatest negative influences however came from stock prices and the money supply - figures not necessarily reflective of trends in consumption or production. Making a positive impact for the month were - surprisingly enough - consumer goods orders (rising for the first time this year), diliveries and building permits. Altogether, this data merely sustains fears that an ongoing housing recession and full turn in consumer spending will lead the economy into a potential recession. - John Kicklighter, Currency Analyst for DailyFX.com