Dow Jones Economic Sentiment Indicator Rises to 39.4 for March; Offers Tentative Signal to End of Economic Doldrums

NEW YORK, March 31 /PRNewswire/ -- Better-than-expected regional business news along with small improvements in several national economic measures provided enough bright spots in a month with decidedly mixed economic news to help drive the Dow Jones Economic Sentiment Indicator (ESI) up in March to 39.4, a modest, but promising, increase from 38.1 in February.

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 to look for positive and negative sentiment about the economy in every article in each of the newspapers.

Although the rise is the best in five months, it remains short of the strong monthly gains the ESI made for much of the first three quarters of 2009.

"Although the rise is modest, it is better than the stagnation of recent months," Alen Mattich, Dow Jones Newswires "Money Talks" columnist, said. "If repeated in April it could indicate that the economy is starting to haul itself slowly upwards again."

The ESI's gain adds weight to the view that after a weak start to 2010 the economy may again be gaining strength. The Conference Board's Consumer Confidence Index registered a gain in March after falling unexpectedly in February.  The Index remains below its levels of December and January. The University of Michigan/Reuters Consumer Sentiment Index's remained flat in March, better than the drop many analysts had forecast.

The ESI represents one of the most comprehensive and far-reaching examinations of media coverage as an economic indicator.  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.

"The logic of using textual analysis of newspapers as an objective and timely measure of expectations is certainly appealing," Dr. Bill D. McDonald, finance professor at Notre Dame University, said.  "The Dow Jones ESI contributes information beyond the traditional aggregate index of leading indicators and, although correlated with the other consumer survey measures, seems to measure information not captured by the surveys."    

The Dow Jones Economic Sentiment Indicator is calculated using a proprietary algorithm through Dow Jones Insight, a media tracking and analysis tool. More information about the Economic Sentiment Indicator and its development is available at http://dowjones.com/esi .

About Dow Jones Insight

Dow Jones Insight 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.

Background information and graphs are available at www.dowjones.com/pressroom/smprs/djesi.html

SOURCE Dow Jones & Company

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED