Ju're listening to Taking Stock with Bim Box and Kathleen Hayes on Bloomberg Radio. Where is the economy heading? That's certainly this is something the Fed to Reserve is asking itself. Bill Dudley, President of New York FED, saying today that he's much more focused on the labor market than he
is on the actual GDP number. That's where we're very happy to have back with this For his monthly chat Ken Goldstein economist at the conference board, they put together the Leading Economic Index, giving us a sense of worth the economy will be in three to six months. It was up zero point four percent in July, following a zero point three percent jump in June and a zero point two percent decline in May. So Ken, where are
we now? Where we are not just in terms of the lead, which tells us about where we're going, but in the coincident, which tells us where we are. This has been a pretty decent, not a great, but at least a decent summer because of the consumer and because of housing, not because of the industrial sector, um and you know all of those attendant things. So in some sense it's a tailor of two economies. Consumers, good housing
is good, industrial activity not so much. Well, Ken, when I go through the list of the leading index and the coincident index, I see everything moving higher except the average consumer expectations for business conditions. Why is that? Because you know, there is this concern, has been this concern really all through the winter and spring and now into the summer. You know, it's as if the consumers saying, not that this is great, not even that this is
necessarily good, but this is okay. We're just worried about what's coming next. They have been and they remain uh in that consideration, and you see some of that. I understand that, But why well, because they're they're worried about what's going to come next, to whether business is going to fall, whether profits are going to fall, whether these job numbers are gonna sustain, or whether they're gonna fall. You know, so that there is this lingering concern that's
been there for quite some time. And you see there's not only in terms of their responses to surveys. You see this in terms of their spending habits. If you look at the you know, the back to school sales as reflected in the latest retail sales numbers, So in your sense of what's going on, Ken, what is driving or not driving the economy right now? Again, it's it's those two things. It's those two things. Consumer okay, industrial activity not so much. And in terms of the overall
broad global economy US okay, the rest of it. So why why is the consumer has not been altogether okay? Certainly okay in the second quarter? But and why is the industrial side not so good? What's what's happening? In some sense this comes right back to to Pim's question, and that is, you know, there is the consideration, is the consumers strong enough that's finally going to pull out the industrial sector or is the industrial sector weak enough
that's going to finally weaken the consumer globally? Is the world weak enough that's going to pull back to US? Or is the U S strong enough that's gonna finally pull up the globe? And it's not real clear either way. Can do you think that this for flex the consumers attitude because of the media attention that's given to bad news? Then what would be why why wouldn't they have a positive outlook if the indicators, in fact, all the others except this one are positive, and you don't just wake
up feeling gloomy every day exactly. And it's and and again it's you know, it's this isn't new. It's been this way for months, maybe even a year and a half, for longer um and so there is this lingering sense. It's as if we've gone through so much over the last decade or so that this is a consumer who sort of is, you know, flinching at the next punch.
Do you think that maybe it's because the consumer who maybe would try to save money isn't getting any interest on their money and as a result that just feel like they're never going to get ahead. That that's another factor. But it's far more about wages than than about that for the average household. So another factor is, indeed, you know, the stagnant wages, you know, not just for a year,
but for a decade or more. You a lot of concern at the FED, certainly if you listen to Jim Bullard, President St. Louis Fed, even to a certain extent, now maybe John Williams s f FED San Francisco, that we're stuck in kind of a low growth, low inflation environment. Do you see that all the work you do on the US economy and global economy. Is that possible right here in the US of A? Is it possible? Yes? Is it likely? That's and which comes back to the
question we've been just been discussing. You know, it's not real clear whether that's the road that we're taken again. Can the consumer really drive the bus here and pull up the rest of the economy. There's a chance that that could happen, but it's just as you know, likely that they're going to be pulled back by the weakness elsewhere. Well, thank you very much. Ken Goldstein, economist for the Conference Board, based here in a New York City