ADS business conditions index from Philly Fed looks strong

 

The ADS is a high frequency business conditions index based on updating of macro data as it is generated. It includes: weekly initial jobless claims, monthly payroll employment, monthly industrial product, month real personnel income less transfer payments, monthly real manufacturing and trade sales, and quarterly real GDP. These data have a blend of frequencies  and is updated as the new macro data are produced, so it is a nowcast of business conditions. Watching this series closely for years, it shows limited amplitude except at extremes; nevertheless, when the index is above zero and growing, the economy is growing. The average value is centered at zero. 

The beginning of the year showed strong indication of a slowdown, but the index has seen a sizable uptrend into positive territory. The current reading shows a top, but it may be early to suggest a growth decline.