The Milwaukee Company Economic Index (“MCEI”) is currently indicating that the economy is in an “Expansion” phase.  An MCEI reading of Expansion is consistent with a healthy economy that is increasing at an above average rate of growth, as well as stable stock market returns.

Current Reading:

The Chicago Fed National Activity Index (“CFNAI”) three-month moving average currently sits at 0.0, which is below the Fed’s “likelihood of an expansion” threshold of 0.2 yet still above the Fed’s “likelihood of a contraction” threshold of -0.7.  Additionally, The Milwaukee Company’s probit model of various economic indicators shows the economy is growing at a stable rate.

MCEI Description:

MCEI uses a combination of the Chicago Federal Reserve’s National Activity Index’s (“CFNAI”) three-month moving average, and a probit model of leading economic indicators, to gauge the stage of the economic cycle in real time.  It is our belief that the use of a probit model to confirm CFNAI’s readings delivers a more accurate forecast.

The table below illustrates how MCEI determines the current state of the economic cycle:

Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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