An Oversold Index
Whatever its retrospective analytical utility, URI Economics Professor Len Lardaro’s Current Conditions Index seems pretty useless as a gauge of future trends. The news reports that use it simply make no sense:
The Current Conditions Index dipped to 33 in September from 42 in August. …
“While Rhode Island will not emerge from its recession until the first quarter of next year, the foundations for an eventual upturn are beginning to fall into place,” he said.
What foundations? Lardaro’s optimism derives from the index’s improvement from last year, when it was alternating between 8 and 0, but the current year figure is relative to that period, so our economy is still shrinking. If last year was terrible, we’re now doing worse than terrible.