Conference Board's Goldstein on the May LEI Index (Audio)

asset of financial advisor brings to a client's portfolio. To find out why, go to human Centric Investing dot com. Hartford Funds distributors l l C. UK citizens are today voting in a referendum on the country's membership of the European Union. UK law prevents us from reporting on voting or discussion and analysis of referendum issues while polls are open, but we will be following all the action as the

results coming across a day of special coverage. The SMP five hundred index up nineteen five, a gain of nine tenths of one percent. Down Industrial is up one hundred sixty six points, also up nine tenths of one percent. Now to stack up fifty five, a gain of one pot two percent. Tenure down fourteen thirty seconds, yield there one point seven three gold down sixty ounce to twelve sixty three, a drop of five tenths of one percent.

I'm Charlie Pellot. That's a Bloombrid business flash. You're listening to taking Stock with Kathleen Hayes and Pimp Box on Bloomberg Radio. Where's the economy? Heaving that question all the more important after FED share Janet Yellen said she thinks it's rebounding. Even so she's gonna wait until she sees the whites of an econmic economic rebound eyes until she's

ready to push for that next interest rate increase. What she thinks is in keeping with where the Fed wants to go, but she's not going to make the mistake of raising it too quickly. Looking Leading Economic Indicators out today, bit of a surprise, heading a bit lower last month, Ken Goldstein joins us Now Economist with the Conference board to look at the latest l EI Leading Economic Indicators Index, And if we'll give Janet Allen any more pause on rates,

can welcome back, thank you. So, what do we see in the l E I. What we see is what we saw last month, in the month before and very likely next month in the month after that, And that is an economy. It's not losing steam, is not picking up steams, So we just continue to muddle along. That's what the Coincident Economic Index, the number that tells us

where we are right now. That's what it's telling us, and the lead is telling us if you look not just at the last month, the last few months, this is just continuing to be a muddle through this summer. Can I wonder if you get into details and tell us about initial claims for unemployment and what that did to the results. You know, that's the you know, without that,

this probably would have been a flat month. But because of the dropping claims, we actually have a zero point to percent decline in the leading Economic Index, so that claims are sort of bouncing a little bit, but bouncing at a very low level. So you know, whether it bounces up this month, it bounces down last month, there's no sign there that the labor market is beginning to

lose steam. Yes, employment is beginning to moderate, and part of that is because at four point seven percent unemployment rate, that pool out there is starting to thin, you know, So it's not as if we're starting to look at and more people being laid off as opposed to being hiring. It's just as I just said, just to continue muddle through. Okay. So Janet Yellen, even though she made it very clear that she's more cautious than ever, she also made it

clear that what she sees is the following. You had week first quarter g d P, so then you had weak jobs in the second quarter. Now, she says, retail sales the consumer driving and we laugh. A couple of retail sales reports have been pretty strong, right, or stronger than they've been in the past. So that means, she says, the economy is picking up. So if you look at the pattern GDP, better jobs better vice versa, in the

second half, we should have stronger jobs growth. But from all the information of the conference boardbuck In, you tell us, well, look, I mean, you know, wages are and d because the labor market is so tight and going to get tighter, that wage growth is starting to pick up, and consumers are very likely to go out and spend that money uh this summer and into the fall, and indeed right

into the holiday season. So consumer spending power and therefore consumer spending plus housing, there's some tail winds here pushing the economy, but the industrial sector of the economy, the trade part of the economy, they've been in weak position and they're not really moving into fact with with the very weak profit growth. In all of this, um you know, we've got this mix of some strong headwinds strong tail winds.

That's why we're stuck in this kind of muddle through and likely to stay in a muddle through through the summer and into the fall months. I wonder if you could give us your thoughts on GDP for the second quarter, what does the tell you about GDP performance, and maybe even for the rest of the year, the rest of the year, probably close to two maybe a little bit more, a little bit less, and indeed not just for the second half of this year, even into the first half

of next year. So no words, is not weakening down to one and a half, but it's not picking up to two and a half. Obviously, if it were to pick up because it wagesn't because of housing, then you'll see more fat action. So if it's only gonna be two percent a little bit less, that doesn't sound like much of a pickup to me, although that would be a pickup from the first quarter. Right, what have we

ended up with still something under one percent? Under one percent second quarter, which is now almost over, It is going to come in closer two percent stay there in the third, fourth, first, second, So is it I mean, so I would take the other side, then why does it fat need to even move on rates at all, at least when it comes to the economy, at least when it comes to overheating or too much inflation. See, that's not an argument per se about weird the economy

is or weird it's headed near term. That's an argument that says they've waited too long and kept into strates too low for too long, and that they need to move to not a tightening but a normalization and you know, begin to move down to that terminal rate. Um. But you know they've waited this, you know, so if they wait until after the election, what's the big deal? If this is the growth path for the economy and that

is a two percent muddel alone. You know, we've been focused a little bit on the real estate market because of new home sales as well as the previous existing new home sales report. What if you could tell us about building permits. Is that a factor in this report

at all? Actually, that's one of the ten components in little leading index UM and what's going on there is a combination of both new home building as well as apartment building UM and they're the problem is not a lack of demand for new homes and new apartments, it's the ability of the builders to put them a fast enough. You know. So there really is some momentum building in the housing market, not necessarily this month, but an overall

old trend. And again you know that momentum in housing driven by the momentum and housing market driven by the labor market along with the pickup and wages. Those are the pauses for the economy. Thank you very much for

coming in and spending time with us. As always, Ken Goldstein, economist for the Conference Board, speaking about the index are leading economic indicators that slipped in May because of that uptick in initial jobless claims, though the index continues to suggest that the economy will expand at a moderate clip

in the months ahead. You're listening to Taking Stock. I'm pim Fox my co host Kathleen Hayes, and you're listening to Bloomberg Radio, a collection of luxury five star hotels, expanding their footprint in two Brussels into Dubai, and more coming up on Bloomberg Radio