An economic index signals expansion
The Decision Analyst U.S. Economic Index has increased steadily over the past 16 months, moving from an Index of 89 in September 2011 to an Index of 101 in January 2013.
The uptrend of the Economic Index over the past 16 months indicates that the U.S. economy will continue to expand, albeit at a slow pace. Moreover, the overall pattern of the Economic Index over the last four years has been a slow, steady upward trend.
The U.S. Economic Index tends to foreshadow overall economic activity by six to 12 months. The graph below shows the Economic Index for the U.S. over the past decade.
“The broad-based U.S. economy appears poised for continued expansion in 2013. The Economic Index trend of the past 16 months, and the longer trend of the past four years, indicate that U.S. economic expansion will continue,” said Jerry Thomas, president and CEO of Arlington, Texas-based Decision Analyst. “Despite the lack of growth in U.S. GDP in the fourth quarter of 2012, it’s very likely that the U.S. economy will continue to expand throughout 2013, especially if Washington can put its financial house in order. However, we live in times of extraordinary risks: fiscal battles in the U.S.; recession in Europe; a real estate bubble in China; stagnation in Japan; and political instability in Syria, Egypt, Libya, and Afghanistan. Any of these risks could spin out of control and negatively affect U.S. economic expansion.”