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Economy in Brief

U.S. Leading Indicators Signal Economic Recovery With Fourth Straight Monthly Increase
by Tom Moeller August 20, 2009

The Conference Board's Index of Leading Economic Indicators continued to suggest a pending economic recovery. The July composite index of leaders rose another 0.6% after gains of 0.8%, 1.2% and 1.1% during the prior three months. The combined 3.8% rise during those four months was the strongest since early-2002 while the index itself was at the highest level since last June. The leading index is based on actual reports for eight economic data series. The Conference Board initially estimates two series, orders for consumer goods and orders for capital goods.

For the fourth straight month, nearly three-quarters of the ten components of the leading index increased.

Again suggesting that the rate of decline in the economy is slowing were the coincident indicators which were unchanged m/m. This compares with monthly declines of 0.6%-to-1.1% dating back to September.

In a sign that excesses in the U.S. economy are diminishing, the lagging index fell for the seventh month in the last eight. The ratio of coincident-to-lagging indicators (a measure of economic excess) rose again m/m to the highest level since December.

The Conference Board figures are available in Haver's BCI database. Visit the Conference Board's site for coverage of leading indicator series from around the world.

Business Cycle Indicators (%) July June May April 6-Month % (AR) 2008 2007 2006
Leading 0.6 0.8 1.2 6.2 -2.8 -0.3 1.5
Coincident 0.0 -0.4 -0.4 -5.4 -0.9 1.6 2.5
Lagging -1.0 -0.7 -0.3 -8.6 2.9 2.8 3.3
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