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'Beige' Report Should Show Even More Red

At a year old, the recession is getting long in the tooth. But it only seems to be getting stronger.

Fresh evidence that the downturn born in December 2007 is intensifying could come Wednesday with the Federal Reserve's "beige book" summary of regional economic conditions. Fed policy makers will study this report ahead of their rate-setting meeting on Dec. 15-16, at which they are almost certain to cut their key interest-rate target well below 1%.

In the October survey, most Fed districts reported tighter credit, slower consumer and business spending and deteriorating job markets. Investors will comb the latest release -- along with the Institute for Supply Management's November survey of service-sector activity, also due Wednesday -- for evidence things are getting worse.

Other timely economic data, such as weekly jobless claims, suggest they are.

The Economic Cycle Research Institute's Weekly Leading Index, a compilation of such bleeding-edge indicators that has in recent decades been a good gauge of economic turning points, is still sinking. Last week its annualized growth rate dropped to the lowest level in its history, dating back to 1949.

"Right now we have a very convincing downturn that shows no sign of turning around any time soon," said ECRI managing director Lakshman Achuthan. On the bright side, the ECRI's indicators aren't pointing to another depression.

That is cold comfort to stock investors. Leading economic indicators aren't necessarily gauges of market turning points. But without some shred of evidence that an economic rebound is near, or at least that things aren't getting worse, rallies will be short-lived...