Dow Jones Economic Sentiment Indicator For May Posts Biggest Fall Since Oct '08 [View all]
By Gren Manuel
Of DOW JONES NEWSWIRES
LONDON -(Dow Jones)- The U.S. economy is fast running into ever-stronger headwinds according to the Dow Jones Economic Sentiment Indicator, which showed a sharp fall in May.
The ESI for May slipped to 43.9 from the April reading of 47.8, its biggest percentage fall since October 2008 and a decline that means it has now given up almost all of the gains made in early 2012.
The economic sentiment indicator is designed to predict the health of the U.S. economy by analyzing coverage of 15 major American newspapers, using a proprietary algorithm to look for positive and negative sentiment about the economy in every article.
Dow Jones' "Money Talks" columnist Alen Mattich warned of reading too much into a single month's fall but added that "a combination of the size of this monthly drop and its already low level is a clear warning the U.S. economy is at risk of contracting over the near term."