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Economy in Brief

U.S. Leading Economic Indicators Rise To New High
by Tom Moeller   October 21, 2010

The Conference Board reported that its Index of Leading Economic Indicators rose 0.3% during September after a downwardly revised 0.1% August uptick that was initially reported at 0.3%. Nevertheless, the latest reading was a record high. Despite these gains, the three-month rate of increase improved just slightly to 2.4% (AR). Still, that was nearly its weakest since March of last year when it was declining. Early this year the index was rising at a double-digit rate. 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 slipped to just 55%. Lower initial jobless insurance claims, higher stock prices, a widened yield spread between 10-year Treasuries & Fed funds as well as a higher real money supply each contributed positively. Vendor performance and building permits fell. Other series were unchanged.

The index of coincident indicators was unchanged for the third month in the last four. Moreover, the three-month change of 0.4% remained its weakest since October of last year. Only two of the four component series ticked up last month including real personal income and business sales. Industrial production declined while payroll employment fell with the decline in the number of Census workers.

The lagging index rose for the third consecutive month as C&I loans increased. The ratio of coincident-to-lagging indicators (another leading indicator) fell for the third consecutive month.

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(%) September August July 3 Month
%Chg.(AR)
2009 2008 2007
Leading 0.3 0.1 0.2 2.2 0.5 -2.7 -0.2
Coincident 0.0 0.0 0.1 0.4 -5.1 -1.2 1.4
Lagging 0.4 0.1 0.4 3.6 -1.6 3.2 3.0
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