·
For November, the Conference Board reported that the composite index of
leading economic indicators fell by 0.4% after an unrevised 0.5% decline
during October. A 0.3% decline had been expected.
· During the last ten years there has been a 59% correlation between the y/y change in the leading indicators index and the lagged change in real GDP.
· The breadth of one month gain amongst the 10 components of the leading index remained quite low at 30.0%. Over a six month period, the breadth of gain amongst the leaders components was 50% for the third month in a row.
· Last month, virtually all of the leader's components fell significantly except hours worked and vendor performance.
· The method of calculating the contribution to the leading index from the spread between 10 year Treasury securities and the Fed funds rate has been revised. A negative contribution will now occur only when the spread inverts rather than when declining as in the past. More details can be found here.
· 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 recovered 0.2% after a downwardly revised 0.1% dip in October. Over the last ten years there has been a 86% correlation between the y/y change in the coincident indicators and real GDP growth.
· The lagging index rose firmly for
the fourth consecutive month due mostly to a higher CPI and higher
C&I loans. The ratio of coincident to lagging indicators (a measure
of economic excess) was unchanged at the lowest level since 1991.