The chart below looks at how the Index of Coincident Economic Indicators (CEI) and the Index of Leading Economic Indicators (LEI) have related to each other over the past 60 years. The graph shows the year over year change in each index, or how much higher or lower the index moved in one year. The light colored bars show recessions. (While I believe the current recession has already ended, it has not been declared over yet by the National Bureau of Economic Research, the official arbiter of determining business cycles).

The chart shows how the CEI consistently move higher after an economic downturn. After every recession in the past 60 years, the CEI has maintained positive year over year growth for an extended period of time, 6.4 years on average. The CEI has been improving since June 2009, but it has not even quite reached a level where it has bested last years values. I believe that after the severe recession we have just experienced, the economy still has many years of improvement ahead.

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