Dow Jones Economic Sentiment Indicator Rises to 38.3
30 Novembre 2009 - 4:00PM
PR Newswire (US)
Positive Trend Driven In Part by Improved Sentiment Towards
Shopping In Holiday Run-Up NEW YORK, Nov. 30 /PRNewswire/ --
Increasingly positive media coverage of consumer spending
contributed to a significant rise in the Dow Jones Economic
Sentiment Indicator (ESI) in November. The ESI rose to 38.3, up
from 36.9 in October. The Dow Jones Economic Sentiment Indicator
aims to predict the health of the U.S. economy by analyzing the
broad coverage of 15 major daily newspapers in the U.S. The ESI has
risen 11 out of 12 months since its low of 22.2 in November 2008,
data that confirm the consensus among economists that the U.S.
recession ended sometime early in the summer. One key area of
improvement in recent months has been in articles on shopping, a
key indicator of consumer confidence as the holiday season
approaches. One way that the indicator helps indicate future
economic trends is by measuring gloomy articles such as Christmas
gift guides which focus on bargain-hunting or store closures and
balancing those with a more positive sentiment such as increasing
spending or store openings. In November 2008 gloomy
shopping-related articles outweighed positive ones by three to one,
helping drive the ESI down to its lowest ever level of 22.2. This
November the balance is much more equal, indicating a healthier
economic outlook and pushing the indicator back to levels not seen
since the collapse of Lehman Brothers -- although retail-related
articles with negative sentiment still remain in the majority. "The
Dow Jones Economic Sentiment Indicator climbed to its highest level
since August 2008, suggesting the U.S. economic recovery is
entrenched and that the number of jobs lost during the month
continued to shrink sharply," Dow Jones Newswires 'Money Talks'
columnist Alen Mattich said. "Market expectations for November job
losses have been falling, a view supported by the indicator. This
in turn could underpin retail sentiment over the next month." The
ESI represents one of the most comprehensive and far-reaching
examinations of media coverage as an economic indicator. The ESI's
back-testing to 1990 shows that the ESI clearly highlighted the
risk that the U.S. economy was sliding into recession in 2001 and
2008 and suggests the indicator can help predict economic turning
points as much as seven months in advance of other indicators.
Unlike some other indicators where 50 is a clear break-point
between recession and recovery, the ESI needs to be read with
reference to longer trends. Based on the ESI's performance since
1990, previous recoveries have been marked by substantial
month-to-month gains, with a jump of three points seeming to be a
sign of significant improvement. A drop below 50 marks the point at
which there is a clear risk of a slowdown. The Dow Jones Economic
Sentiment Indicator is calculated using a proprietary algorithm
through Dow Jones Insight, a media tracking and analysis tool. More
information about the Economic Sentiment Indicator and its
development is available at http://solutions.dowjones.com/esi . Dow
Jones Insight uses innovative text mining and analytic technologies
to help organizations keep informed about relevant issues, news,
conversations and trends emerging in mainstream, Web and social
media. Dow Jones Insight's global content collection includes more
than 25,000 news and information sources as well as blogs, message
boards, and posts from YouTube and Twitter. About Dow Jones Dow
Jones & Company is a News Corporation company. (Nasdaq: NWS,
NWSA; ASX: NWS, NWSLV; http://www.newscorp.com/) Dow Jones is a
leading provider of global business news and information services.
Its Consumer Media Group publishes The Wall Street Journal,
Barron's, MarketWatch and the Far Eastern Economic Review. Its
Enterprise Media Group includes; Dow Jones Business &
Relationship Intelligence, Dow Jones Newswires, Dow Jones Factiva,
Dow Jones Client Solutions, Dow Jones Indexes and Dow Jones
Financial Information Services. Its Local Media Group operates
community-based information franchises. Dow Jones owns 50 percent
of SmartMoney and 33 percent of STOXX Ltd. and provides news
content to radio stations in the U.S. The Dow Jones Economic
Sentiment Indicator is provided for analysis purposes only and Dow
Jones makes no representation that the indicator is a definitive
predictor of sentiment or the health of the U.S. economy. This
report does not in any way reflect an opinion of Dow Jones
regarding the U.S. economy or the suitability of any investments.
DATASOURCE: Dow Jones & Company CONTACT: Rob Thibault of Dow
Jones & Company, Office, +1-609-627-2680, Mobile,
+1-609-216-4780, Web Site: http://solutions.dowjones.com/esi
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