Dow Jones Economic Sentiment Indicator Up Only Slightly to 38.7; Suggests Recovery Could Be Losing Momentum
31 Dicembre 2009 - 4:00PM
PR Newswire (US)
NEW YORK, Dec. 31 /PRNewswire/ -- The media's coverage of mixed
economic news led to a marginal rise in the Dow Jones Economic
Sentiment Indicator (ESI) in December. The ESI rose to 38.7, up
only minimally from 38.3 in November. This slight rise is the ESI's
third weakest performance in a year and much less convincing than
increases in October and November. While the ESI ends the year
significantly higher than the 22.4 level it registered in January
at the start of the year, December's weaker performance means the
indicator failed to break back above the level it held before the
collapse of Lehman Brothers in September 2008. 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. During December, media coverage that
included references to better-than-feared holiday retail sales was
outweighed by articles referencing mixed or negative economic news
including continuing double-digit unemployment and slower economic
growth. "The ESI's significantly slower rate of improvement in
December suggests the U.S.'s economic rebound could be starting to
level off and that non-farm payrolls neither advanced nor declined
by much during the month," Dow Jones Newswires 'Money Talks'
columnist Alen Mattich said. 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://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 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 CONTACT: Rob Thibault of Dow Jones &
Company, Office, +1-609-627-2680, Mobile, +1-609-216-4780, Web
Site: http://dowjones.com/esi
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