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Economy in Brief

U.S. Leading Economic Indicators Resume Upturn
by Tom Moeller June 17, 2010

The Conference Board reported that their May Index of Leading Economic Indicators rose 0.4% following an upwardly revised no-change during April. The three-month rate of increase held steady at 7.2% (AR), still 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 improved slightly m/m to 50%, still near its lowest since March of last year. A steeper interest rate yield curve, stronger money supply growth and longer hours worked contributed the most positive influences on the May index offset by lower stock prices, lower building permits and lower capital goods orders.

The index of coincident indicators rose 0.4% after an upwardly revised April gain, both the strongest monthly increases since November. The three-month change of 4.5% was its strongest since early-2006. All four of the component series including industrial production, real personal income, business sales and payroll employment contributed positively to last month's increase. 

The lagging index slipped 0.1% and has been little-changed since November. 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 (%) May April March Feb. 6-Month % (AR) 2009 2008 2007
Leading 0.4 0.0 1.4 7.9 0.5 -2.7 -0.2
Coincident 0.4 0.4 0.3 2.8 -5.1 -1.2 1.4
Lagging -0.1 0.0 -0.2 -0.9 -1.6 3.2 3.0
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