· Six-month growth in the leaders of -1.4% was the weakest since mid-2002 and does not herald firm economic growth. Negative growth in excess of 2.5% preceded past periods when the US economy entered recession.

· Three quarters of the 10 components of the leading index fell over a one month span with a narrower yield curve, lower consumer expectations and slower money supply growth providing the largest negative influences. Over a six month span 65% of the leaders fell.

· The leading index is based on eight previously reported economic data series. Two series, orders for consumer goods and orders for capital goods, are estimated. 

· The coincident indicators rose 0.3% and the six-month growth rate held at 2.1%, down from the high of 3.3% early this year. During the last ten years there has been an 82% correlation between the six month growth in the coincident indicators and two quarter growth in real GDP.

· The lagging indicators rose for the second consecutive month. The ratio of the coincident to the lagging indicators, a measure of how the economy is performing relative to its excesses, rose slightly but has moved sideways since the Spring.

· Visit the Conference Board's site for coverage of leading indicator series from around the world.

· "Monetary Policy and Inflation Dynamics" from the Federal Reserve Board can be found here.

· "A Neutral Fed Funds Rate?" from the Federal Reserve Bank of St. Louis is available here.

Oct

Sept

6-Month Chg

2002

2001