socialmedian: Dow Jones Economic Sentiment Indicator Rebounds to Highest Level Since August 2008

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Dow Jones Economic Sentiment Indicator Rebounds to Highest Level Since August 2008

Source: CARPE DIEM

Nov 04, 2009

Summary

NEW YORK, November 2, 2009 – The Dow Jones Economic Sentiment Indicator (ESI) rose to 36.9 in October, up from 34.1 in September as a result of positive media coverage of ongoing stock market gains and news that the gross domestic product rose at an annual rate of 3.5 percent in the third quarter (see chart). The gain in the ESI runs counter to unexpectedly large drops in two leading consumer-based economic indicators.

The Dow Jones Economic Sentiment Indicator aims to predict the health of the U.S. economy by analyzing the coverage of 15 major daily newspapers in the U.S. The ESI has risen 10 out of 12 months since its low of 22.2 in November 2008, data that confirm the consensus among economists that the U.S. recession ended sometime early in the summer.

A gain in the ESI historically indicates improvement in the labor market, but significant improvement may still be months away. In past economic recoveries, increases in the ESI have lead improvements in non-farm payroll by two to five months and improvement in the unemployment rate by five to seven months.

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