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I look at the high frequency weekly indicators because while they can be very noisy, they provide a good nowcast of the economy and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. They are also an excellent way to “mark your beliefs to market.” In general, I go in order of long leading indicators, then short leading indicators, then coincident indicators.

A Note on Methodology

Data is presented in a “just the facts, ma’am” format with a minimum of commentary so that bias is minimized.

Where relevant, I include 12-month highs and lows in the data in parentheses to the right. All data taken from St. Louis FRED unless otherwise linked.

A few items (e.g., Financial Conditions indexes, regional Fed indexes, stock prices, the yield curve) have their own metrics based on long-term studies of their behavior.

Where data is seasonally adjusted, generally it is scored positively if it is within the top 1/3 of that range, negative in the bottom 1/3, and neutral in between. Where it is not seasonally adjusted, and there are seasonal issues, waiting for the YoY change to change sign will lag the turning point. Thus I make use of a convention: data is scored neutral if it is less than 1/2 as positive/negative as at its 12-month extreme.

With long leading indicators, which by definition turn at least 12 months before a turning point in the economy as a whole, there is an additional rule: data is automatically negative if, during an expansion, it has not made a new peak in the past year, with the sole exception that it is scored neutral if it is moving in the right direction and is close to making a new high.

For all series where a graph is available, I have provided a link to where the relevant graph can be found.

Recap of monthly reports

December data included a big decline in retail sales, a small decline in industrial production, another big increase in consumer inflation, a small increase in producer inflation, and another decline in consumer sentiment as measured by the University of Michigan.

Note: I have discontinued comparisons with the “worst” readings since the onset of the coronavirus crisis began over one year ago, as they are no longer helpful. I am continuing to post the best readings during the pandemic in parentheses after the current week’s number.

Coronavirus Vaccinations and Cases

At least 1 dose administered: 248.0m, up +2.3m w/w (86.7% of population age 18+)

Fully vaccinated*: 208.6m, up +1.6m (73.4% of population age 18+)

*not counting booster shots

The arrival of Omicron has changed the picture considerably, with record cases and hospitalizations, but ICU admissions and deaths have not followed suit, which is good news (so far).

Long leading indicators

Interest rates and credit spreads


  • BAA corporate bond index 3.50%, down -0.01 w/w (1-yr range: 3.13-3.88)
  • 10-year Treasury bonds 1.78%, up +0.01% w/w (1.08-1.78) (new 1 year high)
  • Credit spread 1.72%, down -0.02% w/w (1.65-4.31)

(Graph at FRED Graph | FRED | St. Louis Fed)

Yield curve

  • 10 year minus 2 year: +0.81%, down -0.09% w/w (0.72 – 1.59)
  • 10 year minus 3 month: +1.66%, down -0.01% w/w (-0.99 – 1.75)
  • 2 year minus Fed funds: +0.89%, up +0.10% w/w

(Graph at FRED Graph | FRED | St. Louis Fed)

30-Year conventional mortgage rate (from Mortgage News Daily) (graph at link)

  • 3.65%, up +0.15% w/w (2.75-3.65) (tied for 2 year high)

After making a 70-year low at the end of 2020, in 2021 corporate bonds remained between the bottom and middle of their 5-year range, and remained near the lower end of that range during the last 6 months – but failed to make a new low in 2021. Therefore their rating has changed to neutral

Treasury bonds yields made an all time low in mid-2020. They increased towards and then fluctuated near the middle of their 5-year range throughout 2021. Similarly, mortgage rates made an all time low during the first week of 2021, and have remained near the bottom of their 5 year range since then. Since as of now neither has made a new low in the past year, their ratings have changed from positive to neutral. Additionally, should mortgage rates rise to a level more than 1% higher than 1 year ago, that is usually enough to put downward pressure on the housing market.

The spread between corporate bonds and Treasuries remains positive, as do two of the three measures of the yield curve remain very positive, while the Fed funds vs. 2-year spread is neutral. In the past 5 months, 2-year Treasuries have increased roughly 0.60% in yields, causing the 10 year minus 2 year spread to compress, but it still remains positive. I will pay more attention to this in 2022, as the bond market anticipates Fed tightening.


Mortgage applications (from the Mortgage Bankers Association) (no report this week)

  • Purchase apps up +2% w/w to 283 (184-349) (SA)
  • Purchase apps 4 wk avg. down -3 to 286 (SA) (341 high Jan 29, low 251 Aug 20)
  • Purchase apps YoY -17% (NSA)
  • Purchase apps YoY 4 wk avg. -12% (NSA)
  • Refi apps down -0.2% w/w (SA) (2 year low)
  • Refi apps YoY down -50% (SA)

*(SA) = seasonally adjusted, (NSA) = not seasonally adjusted

(Graph at here)

Real Estate Loans (from the FRB)

  • Down -0.1% w/w
  • Up +2.8% YoY (-0.9 – 2.9)

(Graph at Real Estate Loans, All Commercial Banks | FRED | St. Louis Fed)

Early in 2021 purchase mortgage applications declined to 2 year lows due to higher interest rates (and probably housing unaffordability as well). All measures are within the middle 1/3rd of their 52 week range, and mortgage rates have failed to make a new low in the past 12 months, so the rating has changed to neutral. Refi is at 24 month lows, so they remain negative.

From 2018 until late in 2020 real estate loans with few brief exceptions stayed positive. Earlier last year they varied between neutral and negative, but for the past several months have been positive.

Money supply

The Federal Reserve has discontinued this weekly series. Data is now only released monthly. November data was released two weeks ago:

  • M1 m/m up +1.3%, YoY up +15.7%
  • M2 m/m up +1.2%, YoY up +13.1%

Corporate profits (Q3 actual + Q$ estimated S&P 500 earnings from I/B/E/S via FactSet at p. 25)

  • Q3 2021 actual, 53.86, up +2.0% q/q
  • Q4 2021 estimated, down -0.16 to 51.32, down -4.7% q/q

FactSet estimates earnings, which are replaced by actual earnings as they are reported, and are updated weekly. The “neutral” band is +/-3%. I also average the previous two quarters together, until at least 100 companies have actually reported.

Q3 earnings came in well ahead of estimates, but are less than 3% above Q2, while Q4 estimates are negative. The average is -1.35%, and so is in the neutral range.

Credit conditions (from the Chicago Fed) (graph at link)

  • Financial Conditions Index down -.03 (looser) to -0.61 (-.58 – -0.72)
  • Adjusted Index (removing background economic conditions) down -0.12 (looser) to -0.71 (-0.55 – -0.75)
  • Leverage subindex down -.02 (looser) to -0.13 (+0.09 – -0.39)

The Chicago Fed’s Adjusted Index’s real break-even point is roughly -0.25. In the leverage index, a negative number is good, a positive poor. The historical breakeven point has been -0.5 for the unadjusted Index. Both the adjusted and un-adjusted indexes have been positive ever since mid-2020. Leverage recently has been close enough to zero now as to have changed from positive to neutral. If it declines below -0.25, it will change back to a positive.

Short leading indicators

Economic Indicators from the late Jeff Miller’s “Weighing the Week Ahead”

The Miller Score is designed to look 52 weeks ahead for whether or not a recession is possible. Any score over 500 means no recession. With this number having fallen below that threshold several months ago, this metric is negative.

The St. Louis Financial Stress index is one where a negative score is a positive for the economy, and during its limited existence, has risen above zero before a recession by less than one year. Thus the present reading is also a positive for the economy.

Trade weighted US$

In early 2021, both the broad rating and the USD against major currencies turned higher YoY, and so changed to neutral. In the past few months, with the measure against major currencies above +5% YoY, this rating turned negative – until this week, when it reverted to neutral.

Commodity prices

Bloomberg Commodity Index

  • Up +2.25 to 103.54 (79.11-105.84)
  • Up +28.7% YoY (Best: +52.3% June 4)

(Graph at BCOM | Bloomberg Commodity Index Overview | MarketWatch)

Bloomberg Industrial metals ETF (from Bloomberg) (graph at link)

  • 177.31, up +3.19 w/w (131.43-186.82)
  • Up +29.0% YoY (Best +69.0% May 7)

Since April 2020 both industrial metals and the broader commodities indexes rebounded sharply. Both total and industrial commodities are extremely positive, with a recent downturn in the indexes having reversed higher.

Stock prices S&P 500 (from CNBC) (graph at link)

There have been repeated all time highs, including two weeks ago, so this metric is positive.

Regional Fed New Orders Indexes

(*indicates report this week) (no reports this week)

The regional average is more volatile than the ISM manufacturing index, but usually correctly forecasts its month-over-month direction. These have usually been extremely positive ever since June 2020.

Employment metrics

Initial jobless claims

  • 230,000, up +23,000 w/w
  • 4-week average 210,750, up +6,250 w/w

(Graph at St. Louis FRED)

New claims have declined to repeated new pandemic lows since February. They remain very positive.

Temporary staffing index (from the American Staffing Association) (graph at link)

  • Down -5 to 99 w/w
  • Up +16.4% YoY (Best +57.4% May 21)

This gradually improved to neutral at the beginning of 2021, and positive since February. It is about 15% higher than its reading at the beginning of 2020.

Tax Withholding (from the Dept. of the Treasury)

  • $326.3 B for the last 20 reporting days vs. $253.6 B one year ago, up +$73.7 B or +28.7% (Best +37.6% April 30)

YoY comparisons turned positive in the beginning of 2021, and have remained that way – usually very strongly so – almost every week since. Beginning in two months, these should be normally reliable again.

Oil prices and usage (from the E.I.A.)

  • Oil up +$5.22 to $84.03 w/w, up +66.7% YoY (high of $84.65 Oct 26)
  • Gas prices up +$.01 to $3.29 w/w, up $0.98 YoY ($3.41 6 year high Nov 11)
  • Usage 4-week average up +11.8% YoY (Best +67.5% April 30)
  • Usage down -0.5% vs. 2019 (Best +3.0% July 8)

(Graphs at This Week In Petroleum Gasoline Section – U.S. Energy Information Administration (EIA))

Both gas and oil prices remain firm negatives, although both have backed off recent 6 year+ highs. As to gas usage, for the next several months both 2020 and 2019 comparisons will continue to be useful.

Bank lending rates

  • 0.129 TED spread down -0.012 w/w (0.0643 -.20) (graph at link)
  • 0.106 LIBOR up +.002 w/w (0.0753- 0.200) (graph at link)

TED was above 0.50 before both the 2001 and 2008 recessions. Since early 2019 the TED spread has remained positive, except the worst of the coronavirus downturn. Both TED and LIBOR declined precipitously, and although both have risen somewhat in the past several months, both are still positive.

Coincident indicators

St. Louis FRED Weekly Economic Index

  • Down -1.05 to +6.11 w/w (+6.11 this week – +12.30 April 29)

In the 5 years before the onset of the pandemic, this Index varied between +.67 and roughly +3.00. Just after the Great Recession, its best comparison was +4.63. The big positive numbers last year were in comparison to the pandemic shutdown of March and April 2020. Since it has now declined to less than half its best YoY level, i.e., below 6.15, it changes to a neutral.

Restaurant reservations YoY (from Open Table)

  • Jan 6 seven day average -21% YoY (Best +31% Oct 21)
  • Jan 13 seven day average -29% YoY (Worst -29% this week)

The comparison year for this metric is 2019 and not 2020. Compared with the depths of the pandemic, in 2021 reservations rebounded to neutral, then positive for a number of months, before declining back to neutral – and negative for several weeks recently. Two weeks ago it plummeted to an 8 month low, as Omicron apparently finally hit; and it worsened this week.

This was the very first weekly indicator to signal collapse when COVID and the ensuing lockdowns started in March 2020. Note I am now measuring its 7 day average to avoid daily whipsaws.

Consumer spending

In April 2020 the bottom fell out in the Redbook index. It has remained positive almost without exception since the beginning of this year. There was never any perceptible change at all due to the Delta wave – and none so far due to Omicron.


Railroads (from the AAR)

  • Carloads down -10.6% YoY (Best +35.3% June 4)
  • Intermodal units down -20.4% YoY (Best +38.3% April 23)
  • Total loads down -16.0% YoY (Best +34.0% April 23)

(Graph at Railfax Report – North American Rail Freight Traffic Carloading Report)

Shipping transport

  • Harpex up +48 to 3865 (1038-3999)
  • Baltic Dry Index down -423 to 1873 (1303-5650) (graph at link) (10 month low)

Rail carloads turned positive early in 2021. Intermodal, reflecting trans-ocean shipping concerns, had generally been positive for several months, before turning back negative. After being generally positive for about 4 months, total traffic has also turned back negative. With the exception of July and August, in which it was better, total rail traffic has been roughly even compared with 2019’s pre-pandemic levels for the same week. This week it was over 10% lower than 2019, almost certainly due to seasonality concerning New Year’s week. If it continues negative next week, I will change the rating.

Earlier in 2021 Harpex repeatedly rose to new multiyear highs, before leveling off in October. It declined from that peak, but in the past few weeks has increased slightly again. Meanwhile, BDI traced a similar trajectory, repeatedly making new multi-year highs. But seven weeks ago it peaked, and fell over 50% since then, largely stabilizing at roughly that level.

I am wary of reading too much into price indexes like this, since they are heavily influenced by supply (as in, a huge overbuilding of ships in the last decade) as well as demand.

Steel production (American Iron and Steel Institute)

  • Up +1.6% w/w
  • Up +4.4% YoY

Since the end of March 2021, against terrible comparisons, this metric had been positive, typically running at a double digits higher YoY percentage growth. Because it has fallen by more than half of its best YoY comparison, and is within 5% of 0, I have dropped its rating to neutral.

Summary And Conclusion

Below are this week’s spreadsheets of the long leading, short leading, and coincident readings. Check marks indicate the present reading. If there has been a change this week, the prior reading is marked with an X:

Long leading Indicators Positive Neutral Negative
Corporate bonds
10 year Treasury
10 yr-2 yr Treasury
10 yr-3mo Treasury
2 Yr Treasury-Fed funds
Mortgage rates
Purchase Mtg. Apps.
Refi Mtg Apps.
Real Estate Loans
Real M1
Real M2
Corporate Profits
Adj. Fin. Conditions Ind.
Leverage Index
Totals: 6 7 1

Short Leading Indicators Positive Neutral Negative
Credit Spread
Miller Score
St. L. Fin. Stress Index
US$ Broad
US$ Major currencies X
Total commodities
Industrial commodities
Stock prices
Regional Fed New Orders
Initial jobless claims
Temporary staffing
Gas prices
Oil prices X
Gas Usage
Totals: 9 2 3

Coincident Indicators Positive Neutral Negative
Weekly Econ. Index X
Open Table
Steel X
Tax Withholding
Financial Cond. Index
Totals: 6 4 1

This week saw impact from Omicron in the continued deterioration of restaurant reservations, plus continued increases in interest rates, and renewed increases in commodity prices.

The long leading forecast remains weakly positive this week, as interest rates continue neutral. Mortgage rates could turn into a negative if they increase much further. Yields on bonds from 1 year duration out through the intermediate maturities have continued to increase, indicating investors expect the Fed to begin to raise rates, as the Miller score has been suggesting for months. But the yield curve, money supply, and credit provision continue to be very positive.

The short leading forecast remains positive, as the rebound in industrial commodity prices is balanced by the increase in gas and oil prices.

Some of the change in the coincident indicators could reflect seasonality. If so, it will resolve in a week or two.

In the next few weeks, Omicron – and the public reaction to it – will be in control. Employee sicknesses and consumer hesitancy will drive the economic activity to take place. Once Omicron recedes, as most expect by February sometime, the short leading indicators suggest that the underlying economy remains strong for the near future, while a poor showing in real retail sales per capita in monthly data joins a number of other long leading indicators suggesting weakness thereafter.

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