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Economy in Brief

U.S. Leading Economic Indicators Slip
by Tom Moeller May 20,2010

Following twelve consecutive monthly increases, the Conference Board's Index of Leading Economic Indicators declined during April. The index slipped 0.1% after a downwardly revised 1.3% March gain. The three-month rate of increase also slipped to 6.5% (AR), its weakest in roughly one year. 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 leading series fell to its lowest since March of last year. Prominent in last month's index decline were lower building permits, quicker vendor performance, lower money supply growth and higher initial claims for unemployment insurance. Just four of the ten components rose. These included higher capital goods orders, a steeper interest rate yield curve, higher stock prices and a longer workweek.

The index of coincident indicators rose 0.3%, the strongest monthly gain since November. The three-month change of 2.0% was near its high of late last year. Increases in all four of the component series including industrial production, real personal income, business sales and payroll employment contributed to last month's increase.

The lagging index rose slightly for the third month since January 2009. Higher C&I loans accounted for most of the increase. The ratio of coincident-to-lagging indicators (another leading indicator) rose slightly to the highest level since July, 2008.

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. The latest U.S. Leading Indicators release can be found here.

Business Cycle Indicators (%) April March February Dec. 6-Month % (AR) 2009 2008 2007
Leading -0.1 1.3 0.4 10.6 0.5 -2.7 -0.2
Coincident 0.3 0.1 0.1 1.4 -5.1 -1.2 1.4
Lagging 0.1 0.1 0.2 -2.9 -1.6 3.2 3.0
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