Index sees U-shaped recovery, growth starting in September

— -- The USA TODAY/IHS Global Insight economic outlook index predicts GDP growth starting in September, the first increase since July 2008. Helping fuel the growth was improvement in financial indicators, such as the stock market, and increases in non-capital goods orders and light-vehicle sales. The rate of decline in the number of hours worked continued to stabilize.

The index predicts future real GDP growth (gross domestic product, adjusted for inflation) based on 11 leading economic and financial indicators. The decline in real GDP, at a six-month annualized rate, slowed from -5.9% in March to -0.9% in August. It's expected to turn positive in September and increase progressively through the beginning of next year.

Seven of the eleven leading indicators in the Economic Outlook Index were positive contributors in August: hours worked, building permits, real non-defense capital goods orders, stock prices, ISM export orders, light-vehicle sales and the corporate bond spread. Four indicators had a negative effect on the index, including the money supply, crude oil prices, the real federal funds rate and the interest rate yield curve.

About the USA TODAY/IHS Global Insight Economic Outlook Index

USA TODAY and IHS Global Insight, a top-rated economic analysis and consulting firm, created this index to help readers track the economic recovery.

The index predicts future gross domestic product (GDP) growth. Real GDP is the value of goods and services produced in the U.S., adjusted for inflation. It is a key measure of economic activity and an important factor in determining whether the economy is in a recession.

To forecast real GDP growth, IHS Global Insight designed a model that produces a weighted composite of 11 leading indicators. The list includes a mix of economic and financial "forward-looking" indicators that have a strong correlation with future economic activity. As a group they accurately forecast economic growth and are sensitive to signs of stress in the economy.