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During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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U.S. Inflation Pressures at 50-Year Low


U.S. inflation pressures fell in December to a 50-year low, indicating policy-makers should focus on economic growth, a research group said on Friday.

The Economic Cycle Research Institute's U.S. Future Inflation Gauge (USFIG), designed to anticipate cyclical swings in the rate of inflation, slipped to 85.5 in December from 86.7 in November.

The reading was the lowest since Aug. 1958, when it stood at 85.3.

"It is notable that the USFIG was in a clear, cyclical downswing in mid-2008, when financial markets and monetary policy-makers alike were mistakenly concerned about the threat of inflation," said Lakshman Achuthan, managing director at ECRI, adding: "With the USFIG now sliding to a half-century low, U.S. inflation pressures are in full retreat." ...

The USFIG annualized growth rate, which smooths out monthly fluctuations, rose in December to minus 36.5 percent from minus 37.7 percent in November.