Leading Indicators Up, GDP Revision Down

We have a mix of good and bad news this morning for you. We will start with the good news: Two of our favorite leading economic indicators—i.e., payroll employment in truck transportation and in temporary help services—rose to new record highs during May, according to Friday’s employment report (charts below). Both are highly correlated with the Index of Leading Economic Indicators, which is available through April.

So there’s no recession evident in these indicators. However, a recession is generally described as two consecutive quarters of falling real GDP. It fell 1.5% during Q1. This morning, the Atlanta Fed’s GDPNow tracking model lowered its “nowcast” for the Q2 real GDP growth rate from 1.3% to 0.9%, i.e., closer to zero.