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ADVANCE ECONOMIC INDICATOR MORE OPTIMISTIC IN JULY

 DETROIT, Aug. 17 /PRNewswire/ -- The Advance Economic Barometer -- a Comerica Bank index that forecasts business activity six months into the future -- rose to 2.4 in July, representing a 0.7 point improvement over a downward revised 1.7 level in June. With the exception of June, this bellwether index of economic direction has averaged 1.4 since March, suggesting real gross domestic product gains averaging 1.5 to 3.0 percent for the economy over the balance of 1993.
 "These readings are not terribly impressive," said David L. Littmann, first vice president and senior economist with Comerica Bank in Detroit. "During the economic recoveries of 1971-73, 1975-76 and 1983-84, the Barometer registered levels of strength between 5.0 and 9.0 for protracted periods. In those instances, the economy followed suit within 6 to 12 months, exhibiting quarterly real growth rates between 5 and 10 percent. Chances of similar gross domestic product strength emerging in 1994 are fading because of the fiscal drag exerted by tax increases," Littmann said.
 "Another significant aspect of July's Barometer reading is its ability to foreshadow Michigan's economic strength seven months ahead," Littmann said. "The Advance Economic Barometer is performing at levels nearly a full point lower than last fall, meaning that the Michigan Business Activity Index (a barometer of changes in real output and income for the state) will be less vigorous in January 1994 than it was at midyear."
 The Advance Economic Barometer combines three series into a single, balanced and comprehensive leading indicator: inflation-adjusted money growth, yield curve spread, and the Commerce Department's Index of Leading Indicators.
 -0- 8/17/93
 /CONTACT: David L. Littmann, first vice president & senior economist, Comerica Bank, 313-222-4568/
 (CMA)


CO: Comerica Bank ST: Michigan IN: FIN SU: ECO

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Publication:PR Newswire
Date:Aug 17, 1993
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