Tales From The Great Depression II: Leading Economic Indicators in U.S. Unexpectedly Rise

It's always unexpected. Because it seems the analysts are always wrong.

The index of U.S. leading economic indicators unexpectedly rose in September, led by a surge in the money supply as the Federal Reserve pumped cash into the economy to unfreeze clogged credit markets.

The Conference Board's gauge increased 0.3 percent after a 0.9 percent decline the prior month that was almost twice as large as previously estimated, the New York-based private research group said today. The index points to the direction of the economy over the next three to six months.

So, does this mean things might get better?

No so fast.

``October's index will plunge,'' said Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd. in Valhalla, New York, who correctly forecast the gain. The index ``is consistent with recession, and it has not hit bottom yet.''

The leading index was forecast to decline 0.1 percent, according to the median of 53 economists in a Bloomberg News survey. Estimates ranged from a drop of 0.6 percent to a gain of 0.5 percent.

Props to Mr. Shepherdson for being right. Maybe we ought to be told who's wrong in these stories so we know who to ignore next time things happen unexpectedly.