The Dow Jones Economic Sentiment Indicator increased in November, as the U.S. economy looks better than it did during the summer.
The ESI rose to 42.0, up from 40.5 in October. The November reading was the best since a 44.0 posted in June. Even so, the level remains quite low.
“There’s still a feeling of bumping along the bottom, with the risks skewed to the downside,” said Dow Jones Newswires Money Talks columnist Alen Mattich. “A recovery of sorts may still be in place, but, as the ESI highlights, it hardly feels like one.”
As has been the case for the past few months, the protracted sovereign debt crisis in the euro zone was a major source of the negative coverage in November.
In the U.S., the unexpected strength in holiday shopping triggered a spate of positive coverage toward the end of the month. In addition, positive coverage was generated by discussions over the possible extension of the Social Security tax cut into 2012.
The economic sentiment indicator is designed to project the health of the U.S. economy by analyzing coverage of 15 major American newspapers, using a proprietary algorithm to look for positive and negative sentiment about the economy in every article.
The ESI is reported on a scale of 0 to 100; higher numbers represent increasingly positive sentiment. Dow Jones selected the 15 newspapers used to compile the indicator because they include extensive original reporting on economic issues. They are also geographically diverse and represent eight of the 10 largest metropolitan areas in the U.S.