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Economy in Brief

U.S. Leading Economic Indicators Rise Again Signaling Positive Growth
by Tom Moeller December 17, 2009

The Conference Board's Index of Leading Economic Indicators continued its uptrend last month giving a strong signal that the recent recession has ended. The 0.9% rise during November was the eighth consecutive monthly increase. Moreover, the 10.2% (centered) rate of increase during the last six months was nearly the strongest since early-1983. The leading index is based on actual reports for eight economic data series. The Conference Board initially estimates two series, consumer and capital goods orders.

The breadth of increase amongst the component series sagged again last month. Sixty-five percent of the components rose during November versus last month's reading of 70% that increased. During the most recent six months, however, 80% of the series rose. Prominent in last month's increase was a longer workweek, fewer jobless insurance claims, more building permits, and the steeper interest rate yield curve. These gains were offset by easier vendor performance, lower consumer expectations and a downtick in capital goods orders.

Continuing to suggest that the rate of decline in the economy is slowing were the coincident indicators which rose for the first month in the last three. The 0.2% gain followed an unrevised no-change during October. During the last six months the 1.4% rate of decline in the coincident series compares with a shortfall of 8.0% at its worst in January. Moderation of earlier declines has been due to higher industrial production, higher real personal income and higher business sales as well as easier declines in payroll employment.

In a continued sign that excesses in the U.S. economy are falling, the lagging index has been falling since January. Leading the decline has been lower commercial & industrial loans outstanding as well as slower growth in labor costs and less consumer credit. The ratio of coincident-to-lagging indicators (another leading indicator) also continued higher for the eighth straight month to the highest level since November.

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 (%) November October September August 6-Month % (AR) 2008 2007 2006
Leading 0.9 0.3 1.2 10.2 -2.8 -0.3 1.5
Coincident 0.2 0.0 -0.1 -1.4 -0.9 1.6 2.5
Lagging -0.4 -0.2 -0.5 -6.3 2.9 2.8 3.3
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