Another window into what's really happening in the economy is the relatively new logistics managers index. The chart below shows a three-month moving average of the logistics index compared with the average of the extreme-adjusted manufacturing PMI and ISM. The logistics index has been falling since February.
The conclusions are obvious.
The chart below shows the logistics managers' index compared with the average of the PMI/ISM indices. The PMI and ISM indices are both extreme-adjusted, and the Logistics Index is smoothed with a 3-month moving average. The recovery is strengthening.
The logistics managers' index (the LMI???) has fallen to a record low (though it doesn't have a very long history). Note that the ISM and PMI indices were extreme-adjusted before averaging. The LMI was not extreme-adjusted, though it has been fitted with a 3-month centred moving average.
The chart shows the 3-month moving average of the US logistics index compared with the average of the extreme-adjusted US ISM and PMI manufacturing indices.
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| Clich on chart to see a cleaere image |
The Logistics Managers' Index is, like the Purchasing Managers' Indices (PMI), a survey which simply measures whether the components of the index are up or down on the previous month, and not by how much. It has a high correlation with the PMI/ISM indices, but the survey has only been taken for the last 8 years.
In the chart below, the ISM and PMI indices have been extreme adjusted before they were averaged; the logistics index is a 3-month moving average of the published series.
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| Click on chart to see a clearer image. |
