TrendPointers Economic Sentiment Signals Remain at Record Low Levels while Recession Debate Continues

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While economic sentiment remains negative observers cannot resolve whether a recession is evident or if a new type of recession has evolved. There has been an increased interest in sentiment measurements as apparent evidence of the state of the economy.

Economic observers are looking for an intellectual confirmation for calling a recession.

Market observers have been using the term economic sentiment and consumer "sentiment" a great deal lately while the use of the "recession" word has receded a bit. There is a wide range of conflicting interpretations about whether the US economy, and eventually the world economy, will be in a classical recession. Over the past four weeks the use of the recession word has decreased relative to the attention being given to measures of sentiment as a surrogate. Perhaps economic observers are so unsure about the presence of a recession that they are relying on the interpretations of their very own audience. If everyone has negative sentiment then we are in a recession; if people are more optimistic than maybe we are not or will not be in recession. The Federal Reserve chief has stated the US will likely avoid a recession but the slowdown will be long. The major question is whether the current financial crises and energy costs represents a legitimate transformation in the nature of the worldwide economy and how it is measured.

Media Sentiment Remains Negative to Watchful

Economic sentiment in the business media remains largely negative to watchful (80%) down very slightly from one month ago (83%). In contrast, Mass Media and Guru Media sentiment have not moved, with roughly 9 out of 10 negative or watchful. The notion of a recession or some type of economic equivalent seems to have established itself throughout the media. The June Sentiment Signals are:

  • Guru Media Sentiment: Positive 9% vs. Negative 39%
  • Business Media Sentiment: Positive 20% vs. Negative 36%
  • Mass Media Sentiment: Positive 11% vs. Negative 43%.

Most market observers have written 2008 off, some are projecting that the recovery will be realized in 2009, and now 2010 has now appeared in discussions as the point of recovery.

Sector indicators: TrendPointers monitors three barometers of sentiment; the housing market, China and our "Recession Watch". All three remain in predominantly negative territory.

TrendPointers Trend Impact Score (TIS) of technical indicators has reached a new low of -0.8 driven by the surging oil prices and dollar/deficit concerns. The TrendPointers TIS is a composite of 25 key indicators that represents the overall performance of the economy and confidence.

Announcement. TrendPointers Institutional Sentiment Report is now available at http://www.TrendPointers.com . TrendPointers, LLC is a business trend and research firm that investigates how the continuous flow of news and public information influences business decisions and influences the financial markets.

Contact: TrendPointers, LLC
Rich Spitzer, Publisher
Northbrook, IL
Tel: 877-550-1907

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