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ADVANCE ECONOMIC BAROMETER UP IN JUNE

 ADVANCE ECONOMIC BAROMETER UP IN JUNE
 DETROIT, July 22 /PRNewswire/ -- In June, the Advance Economic


Barometer (AEB) rose to a level of 3.0, up 0.5 from May, and its highest mark in nearly four years. The leading economic indicator, compiled by Comerica Bank of Detroit, is currently projecting real GDP growth of 4 percent by the fourth quarter. In addition, if June's improvement is maintained, it increases the likelihood of higher interest rates before year-end.
 June's improved performance for the AEB was due to continued acceleration of inflation adjusted money supply growth and the government's index of leading indicators. In an effort to obtain a more reliable gauge of Federal Reserve policy, the AEB's money supply component now includes both M3 and the Monetary Base. Inclusion of both monetary aggregates will capture the stimulative 8-percent growth for the Monetary Base, and sluggish 2-percent growth for M3.
 Faster growth for the Monetary Base reflects Fed stimulation in the form of strong bank reserve growth, while weak M3 performance is due to significant declines in small and large time deposit accounts (CDs). Including both monetary aggregates in the Advance Economic Barometer will enhance its predictive capabilities. The other two components which comprise the AEB, the yield curve spread and the index of leading indicators, are currently projecting an improved economy in the next six months.
 The AEB combines three series into a single, balanced and comprehensive leading indicator: (1) inflation-adjusted money growth (2) yield curve spread and (3) Commerce Department's Index of Leading Indicators.
 -0- 7/22/92
 /CONTACT: David G. Sowerby of Comerica, 313-222-4829/
 (CMA) CO: Comerica Bank of Detroit ST: Michigan IN: FIN SU: ECO


ML -- DE010 -- 1832 07/22/92 11:13 EDT
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Publication:PR Newswire
Date:Jul 22, 1992
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