From Economic Policy Journal:
Here's how Richard Davis of Consumer Metrics sees the current economy. Bar none, his is the best real time macro-economic tracking data. He emails:
On July 6th we reported that the nearly relentless decline in our 'Daily Growth Index' had leveled off, but cautioned that the index should be viewed from a longer perspective. Since then the decline has resumed:
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When the most recent period of contraction in our 'Daily Growth Index' (January 15, 2010 to date) is charted along with the similar 'Daily Growth Index' contraction events from 2006 and 2008 (with the first day of each contraction aligned on the left-hand axis) the relative severity of each contraction can be visualized.
(Click on chart for fuller resolution)
One measure of the true severity of an economic slowdown is the 'area under the curve' (or 'above' the curve in this case) swept out by the 'Daily Growth Index' over time. This area is just the average magnitude of the decline times the duration of the contraction event. During the 2006 slowdown this area was about 136 percentage-days of contraction, while the 2008 event was much more severe at 793 percentage-days. The 2010 event has now reached 288 percentage-days, over twice the severity of 2006 and well over a third of 2008 'Great Recession' -- and it is still growing....MORE
