Consumer Metrics Institute Data: Red Alert?

This post highlights current readings from the Consumer Metrics Institute.  Previous posts solely concerning the Consumer Metrics Institute can be found on July 27 and March 31; as well CMI data is included in the monthly "Updates On Economic Indicators."

Here is a chart of CMI's Daily Growth Index: (click on chart images to enlarge)



As one can see, the Daily Growth Index is rapidly approaching the low of the 2008 reading; perhaps more importantly there seems to be no signs of abatement in its downward trajectory.  Also of great importance is the rift between its reading and that of Quarterly GDP.

The second chart is CMI's Contraction Watch:



Here again, the readings are rather draconian, even when compared to the 2008 event.

Lastly, here is a chart from Doug Short's blog of 8-22-10.  It shows CMI's Growth Index vs. the S&P500 and GDP.  As one can see, if one believes in the efficacy of CMI's Daily Growth Index both the S&P500 and GDP seem destined for rather sharp downward trajectories:



Of course, before one can draw solid conclusions from CMI's data, one has to have a solid understanding of the methodologies used.  This is difficult with CMI's data as it is proprietary, and as such, it is much akin to other "black box" mechanisms where computations aren't disclosed.

As well, as CMI stated in their August 20 commentary, "Remember that our data only reflects consumer demand for discretionary durable goods."

However, from an "all-things-considered" basis, it would appear as if CMI's readings present the most negative forecasts among popularly published indicators.

As I stated in the July 27 post, "It should be very interesting to see how the CMI’s readings evolve as compared to actual economic activity…"


SPX at 1071.69 as this post is written