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Economy in Brief

U.S. Leading Economic Indicators Are Strong Again
by Tom Moeller  January 20, 2011

The Conference Board reported that its Index of Leading Economic Indicators rose 1.0% during December after an unrevised 1.1% November gain. The latest level of the index was a record high and the monthly gain exceeded Consensus expectations for a 0.6% increase. These gains pulled the three-month rate of increase up sharply to 10.2% (AR), its strongest since January. 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 remained firm at 70%. Higher building permits and a steeper interest rate yield curve together accounted for three-quarters of the December increase followed by lower initial claims for unemployment insurance, higher stock prices and improved consumer sentiment.

The index of coincident indicators ticked higher for the third month. The three-month change of 2.0% remained down sharply from 4.5% during May. Each of the four component series ticked up last month including payroll employment, real personal income, business sales and industrial production.

The lagging index rose 0.3% after the 0.1% November dip. The ratio of coincident-to-lagging indicators (another leading indicator) slipped following two months of increase. It remained 5.9% above its early 2009 low.

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(%) Dec Nov Oct Y/Y 2010 2009 2008
Leading 1.0 1.1 0.4 5.8 7.8 0.3 -3.1
Coincident 0.2 0.1 0.2 2.1 1.1 -5.4 -1.3
Lagging 0.3 -0.1 0.0 0.8 -2.9 -1.9 3.1
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