The consensus is that Federal Reserve Board governors will leave the Fed’s key rates untouched but will talk a lot about exit strategies when they meet on June 23 and June 24. The latter supposition arises from the data suggesting a) signs of recovery or b) signs of stability. The Conference Board Leading Economic Index increased 1.2 percent in rising for the second month in a row, prompting Conference Board economist Ken Goldstein to state that “the recession is losing steam. Confidence is rebuilding and financial market volatility is abating. Even the housing market appears to be stabilizing.” So, if all this continues, a slow recovery will commence by the end of the year. “However, employment will take longer to turn around,” Goldstein cautions.
The Federal Reserve Bank of Philadelphia’s bellwether June Business Outlook reports similar findings, divining a recovery in the next six months. New residential construction numbers from HUD improved on a month-over-month basis, but continued their dizzying decline from a year earlier. The weekly unemployment figures released June 18 showed some stability, but welfare rolls are climbing for the first time since the Clinton reforms of 1996—by double digits in some states—as the jobless disembark from the unemployment insurance train.