U.S. Economy In Holding Pattern According To Dow Jones Economic Sentiment Indicator
Economic Sentiment Level After Three Months of Volatility
NEW YORK, Nov. 30, 2010 /PRNewswire/ -- Following three months of dramatic ups and downs, the Dow Jones Economic Sentiment Indicator (ESI) landed at 43.9 in November, even with October's figure.
"The ESI signals that the economy is in a holding pattern," Dow Jones Newswires "Money Talks" Columnist Alen Mattich said. "If it had risen sharply, confirming October's strong rise, then it would have been a very positive sign. Instead we are seeing an economy still poised between modest growth and a slipping back."
The ESI is determined by in-depth analysis of national news coverage across 15 daily newspapers.
Positive news in November included articles charting fewer troubled loans on banks' books, increased interest in the expensive pastime of kiteboarding and Korean automaker Kia hiring 1,000 workers in West Point, Ga. Articles covering the debate on the extension of the Bush-era tax cuts were generally positive in tone though those covering "Black Friday" were generally negative as they focused on saving money in the weak economy.
The Dow Jones Economic Sentiment Indicator aims to predict the health of the U.S. economy by analyzing the coverage of 15 major daily newspapers in the U.S. Using a proprietary algorithm and derived data technology, the ESI examines every article in each of the newspapers for positive and negative sentiment about the economy. The indicator is calculated through Dow Jones Insight, a media tracking and analysis tool. The technology used for the ESI also powers Dow Jones Lexicon, a proprietary dictionary that allows traders and analysts to determine sentiment, frequency and other relevant complex patterns within news to develop predictive trading strategies.
The ESI's back-testing to 1990 shows that the ESI clearly highlighted the risk that the U.S. economy was sliding into recession in 2001 and 2008 and suggests the indicator can help predict economic turning points as much as seven months in advance of other indicators. More information about the Economic Sentiment Indicator and its development is available at http://dowjones.com/esi .
About Dow Jones Insight
Dow Jones Insight (http://www.dowjones.com/product-djinsight.asp) uses innovative text mining and analytic technologies to help organizations keep informed about relevant issues, news, conversations and trends emerging in mainstream, Web and social media. Dow Jones Insight's global content collection includes more than 25,000 news and information sources as well as blogs, message boards, and posts from YouTube and Twitter.
About Dow Jones
Dow Jones & Company (www.dowjones.com) is a News Corporation company (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV; www.newscorp.com) and a leading provider of global news and business information. Its principal products include The Wall Street Journal, Dow Jones Newswires, Dow Jones Factiva, Barron's and MarketWatch. Through its Local Media Group, Dow Jones operates community-based newspapers and Web sites. Dow Jones also provides news content to television and radio stations.
The Dow Jones Economic Sentiment Indicator is provided for analysis purposes only and Dow Jones makes no representation that the indicator is a definitive predictor of sentiment or the health of the U.S. economy. This report does not in any way reflect an opinion of Dow Jones regarding the U.S. economy or the suitability of any investments.
SOURCE Dow Jones & Company
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