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Economy in Brief

June Leading Indicators Up, Revisions Suggest Improved Prospects
by Tom Moeller July 21, 2005

The June Composite Index of Leading Economic Indicators reported by the Conference Board rose 0.9%. Revisions to the prior two months raised May to no change from a 0.5% decline reported initially and April to plus 0.2% from no change. Six-month growth in the leaders improved to 0.6%.

The method of calculating the contribution to the index from the interest rate yield spread was revised. A negative contribution will now occur only when the spread inverts rather than when declining as in the past. More details could be found here.

Amongst the 10 components of the leading index the breadth of one month gain improved markedly to 80%, the highest since October 2003. In June, only a decline in new orders for nondefense capital goods made a negative contribution.

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 by 0.2% (2.8% y/y), continuing the steady up trend in place since early 2003.

The June lagging indicators rose 0.3% and the prior month's gain was revised up to 0.4%.

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

Monetary Policy Report to the Congress from the US Federal Reserve Board is available here.

Business Cycle Indicators June May 6-Month Chg 2004 2003 2002
Leading 0.9% 0.0% 1.2% 7.7% 5.1% 5.0%
Coincident 0.2% 0.1% 0.3% 2.7% 0.4% -0.6%
Lagging 0.3% 0.4% 5.8% -0.1% -0.1% -0.7%
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