The Composite Index of Leading Economic Indicators fell 0.3% in January following two months of 0.3% gain, reported the Conference Board. The six-month growth rate for the leaders remained negative at -1.4%. Six month growth in the leaders deeper than -2.5% preceded past US recessions.

The breadth of one month gain amongst the 10 components of the leading index narrowed to 40% from 60% in December and 70% in November and the six month breadth of gain backpedaled to 50% from 70% the prior period. The largest negative contribution was made in January by lower vendor performance. Stock prices and the yield curve also were negative contributors.

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.

A longer leading indicator, the ratio of the coincident to the lagging indicators which measures actual economic performance relative to excess fell from the record high in December, the first decline since September.

The coincident indicators were unchanged following an upwardly revised 1.1% surge in December. The six-month growth rate dipped slightly to 3.6%. During the last ten years there has been an 84% correlation between the six month growth in the coincident indicators and two quarter growth in real GDP.

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