This week saw another run of rotten economic news. Housing starts plummeted, industrial production fell sharply, the Philadelphia Fed index hit its lowest level in more than 18 years, and first-time unemployment claims increased. Even the Fed minutes had a weaker tone. With this much crummy news, we wonder if there is a silver lining somewhere.

An apparent bright spot was a rise in the index of leading economic indicators. Though January marks the second consecutive monthly rise for the LEI, it does not likely mark a turn. Most of the improvement in recent months has come from the money supply and interest rate spread. Consumer expectations also improved in January. Expectations turned back down in February, however, and many other indicators also look like they will decline this month as well.

The January price data are both good and bad news. Both rose more than expected in January. Larger-than-expected rises in both indices would normally be bad news. But with so many folks worried about deflation, a little more heat in the PPI and CPI is not all that bad.