Consumer Metrics Institute, Inc.

The demand side of the U.S. Consumer Economy has been in contraction since January 15th, 2010. This slowdown should cause the recently reported growth in the production side of the economy to turn negative during the second quarter of 2010.

The details behind a popular leading economic index point to problems down the road. The real-time indexes provided by the Consumer Metrics Institute are seeing contraction now.

The Daily Growth Index published by the Consumer Metrics Institute has recently recorded an annualized contraction rate of 1.24%. This index records trailing 'quarter' consumer demand, and is a demand side proxy for a real-time 'GDP'.

The forecasts provided by some widely followed leading economic indexes have disconnected from the eventual results in the real economy during the recent recession and current recovery. Those disparities become particularly evident last week.

The Consumer Metrics Institute's trailing quarter of Leading Indicators transitioned from growth to contraction, placing the quarter among the lowest fifth of quarterly GDP changes recorded since 1947 by the Bureau of Economic Analysis.

The daily Consumer Leading Indicators published by the Consumer Metrics Institute turned down sharply during December, reaching levels on December 11th that were down over 10% from daily readings recorded in early November.

A daily Consumer Leading Indicator published by the Consumer Metrics Institute peaked on August 13th, 2009 with a value indicating annual growth of 10%. Since then the daily index has dropped to levels representing annualized contraction of about 2%.

The most closely watched set of 'Leading Economic Indicators' are based on mid 20th Century methodologies geared to the pace of those economies. The Consumer Metrics Institute uses new technologies that can cope with the speed of today's economies.