Index points to slow growth
Arlington, Texas-based research firm Decision Analyst reported that its U.S. Economic Index moved from 99 in February 2013 to 100 in March 2013, an increase of one point.
The U.S. Economic Index has essentially been flat over the past 10 months, fluctuating in a narrow range just below 100.
This pattern is a leading indicator of slow growth for the U.S. economy during 2013 -- and forecasts a continuation of the economic malaise. On the positive side, the U.S. Economic Index is not yet indicating the likelihood of outright recession in 2013 (i.e., declining GDP). The feeble growth of the U.S. economy in 2013, however, does increase the risks of a recession; that is, it would not take much in the way of negative shocks to the economy to tip the U.S. into a recession.
“The U.S. economy faces many risks in 2013, as well as some upside possibilities.,” said Jerry W. Thomas, president and CEO of Decision Analyst. “On the downside, tax increases and high gasoline prices, plus sequestration in Washington, D.C., and the recession in Europe, could create barriers to U.S. economic growth. On the positive side, the U.S. could be poised for expansion in 2013 if the price of oil falls below $85 a barrel, if natural gas prices remain below $4 a thousand cubic feet, and if Corporate America begins to make major investments for the future."
The West South Central and the New England Census Divisions are tied for the highest Economic Index, with a score of 104. The East South Central Census Division has the lowest Economic Index at 96. (See map below.)
The Index numbers for the Census Divisions are three-month moving averages, to smooth out fluctuations due to smaller sample sizes. The reported Index number averages the current month with the previous two months.