Coincident Indicators Indicate Continued U.S. Recession
The Conference board now says the index rose 0.1% in May, but that seems highly likely to be revised down to a decline just as initially reported increases in previous months were revised to show declines. Also, both the April and even more so the May numbers for personal income were temporarily and artificially boosted by the so-called tax rebates sent out by the Federal government. As these rebates are only excluded to the extent they are classified as transfer payments and as most rebates are instead classified as tax reductions, this means that the April and May coincident indicator numbers will be artificially high. However, once they stop sending out the rebates, the index will again fall to fairer levels.
Considering that the decline has been going on for more than 6 months, it seems clear that a recession will eventually be formally declared, and that the starting point for this recession will be declared to be November 2007.