You're listening to Taking Stock with Kathleen Hayes and Pim Fox on Bloomberg Radio. Where is the economy heading? Is it heading for an interest rate increase in December? Or is it going to have to wait and see. That's why we're so happy to welcome back Ken Goldstein. He's economists with the Conference Board to take a look at the Leading Economic Indicators Index put together by the Conference Board every month. It's been had a bit of a rocky road. It was up at zero point five last month,
down zero point two. If you look out and sort of average where it's going. It continues to uh point towards growth. The question is how much? And the question big question there enough for the Fed? So can let's start with what we're seeing in the latest l EI for the month of August really, in a sense, no change from what we've been looking at all through the spring,
all through the summer, and now into the fall. You've got a weak industrial sector, You've got some strength and services because of the consumer and housing that really hasn't change. So while the number fluctuates from one month to the next, there's no sign here either of acceleration of growth. But certainly no sign here of deceleration of growth anytime soon? Can twenty seven? I think you've been doing this for twenty seven years? Correct? No, no, no, I thought since nine,
since seventy even oh even better, well done, even better? Okay, all right, So in that context, as an economist, are there new tools? Are there new ways of looking at the economy that would be just as relevant because you're not just an economist, you're also someone that understands and has his pulse on kind of what's happening in the in the world. You have to be to stay on top of things. What kinds of tools because you say, all right, you know it's flat, a little more of
the same, bad, so on. But how can you add some nuance to all of that? This is a great question because again, if you split between the industrial corps and we have really good metrics of the industrial coo or and that's where you get the you know, the boom and busted the economy. Give us some examples of, like, you know, what kind of great measurements in those kinds
of businesses. You look at industrial production, you look at orders, which is a leading indicator about where industrial productions going. As really been soft. Um, you look at at business confidence. Are they confident enough to say, okay, go ahead, let's
green light that project. You know. So we're looking at capital investment, we're looking at industrial production, we're looking at orders, and all of it tells us not that it's falling apart, even though in the oil patch it's beginning to improve a little bit, but elsewhere there's really no change, not since the spring, maybe not since the winter. It's in the service sector that we keep saying, you know, we need new measures. We didn't have this back in seventy
one or earlier. But the service sectors don't have that boom and bust. If you look at it regionally, you want to pick up what's going on in the Midwest, what's going on in the South. You don't want to look here at the Northeast quarter because it's a service economy and they just said you don't get the boom and busted it. So you want to look at sectors. You also want to look at regions, and all of
that is telling us. You know, what we're getting here is relatively modest or moderate growth, whatever adjective you want to use. It's not soft, but it certainly isn't strong. And more important, there's no sign here of an acceleration separate. Separate from that is the difference between some of these measures and jobs. Jobs are very good, much better than
some of the rest of it. And so there's a little bit of a puzzle here, which number do you follow, especially if you're the FED, look at jobs or look at some of the rest of this. In your view as somebody again who has watched the economy for many, many years, uh, is it your sense that whatever the economy needs to grow faster, whatever businesses need to actually start investing again, business investment has been so weak the past,
not just in the US, that's a global store. Okay, So is this something that is receptive to fixable through can be affected by monetary policy? And so so then the the point so this is okay, no, why then tell me why? Because I think there's an assumption, certainly among central bankers that they can affect this by keeping stimulus paddle to the metal. You know, Look, what you need is demand. You need enough demand to push the product out. You need enough demand to get a price increase,
so you generate the funds to generate that investment. So even though the Fed and Central banks have been very accommodative and remain so, and money is as cheap as possible, but you're not seeing the investment because they don't see the growth and they don't see the the the price increase to be able to justify our rate to return to that new investment. And again it's not new. It's not a U S story. You see that across the globe. In fact, in some sense we're in better shape than
a lot of the rest of the world. I want you to expand on that idea if you can, because, as you noted, it is a changed economy and a changed world. And sometimes we are too attuned and can convince our els that certain things are true. What are some of the misconceptions out there that you are seeing
and that you hear documented? But he raises a red flag with gold team in a conference Yeah, one of the things we have the conference board, have been preaching for forever and it's more true now than it ever was. You have to innovate or is the great economist Bob Dylan once said he was not busy being born as busy dying. Where's the innovation and where's the investment dollar backing up that innovation. But again, I mean, you know, if the demand isn't there, the price isn't there, where's
the money, where's the way to return? That's the missing piece, and where's the confidence on the part of business to go ahead and bite the bullet and say, you know, let's try this, let's see where it goes. Let's economy. We're in a mature economy, um, And the question is are you know, are we at the late stage of maturity or the early stage? Well, the answers both. Can
fiscal spending make the difference? Government of Okay, what kind of fiscals infrastructure and happy to help somebody innovate a new tech quality because that's where the infrastructure is. That that's where the railroads and the highways and the tunnels and the bridges for tech companies or services. But you do need a grid that can handle all of that, and we don't have that. You don't remember something we had that blackout back in what was it seventy five
or something. They told us it would cost fifty billion dollars to fix it, so that would never happen again. We've never invested depending on that, Thank you, very much. Always a pleasure to have you with us. Ken Goldstein is economist for the Conference Board. Uh, well, we know it was down zero point two in the month of August. You're listening to taking Stock. I'm pim Fox, my co host Kathleen Hayes, and this is Bloomberg.