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Economy in Brief

U.S. Leading Economic Indicators Rise is Strong
by Tom Moeller   June 17, 2011

The Conference Board reported that its Leading Economic Indicators index rose 0.8% last month following a 0.4% April decline, initially reported as -0.3%. Consensus expectations were for a 0.2% rise in May. Despite the latest increases, three-month growth in the series fell to 4.3% (AR) which was down from 7.8% in 2010.

The breadth of increase among the components, measured by the 1-month diffusion index, increased sharply to 85%. A wider interest rate yield spread, higher building permits, higher consumer expectations and a higher money supply made the largest contributions to the May increase. Quicker vendor delivery speeds made the only negative contribution.

The index of coincident indicators again ticked 0.1% higher in May after an unrevised 0.1% April increase. The three-month annualized rate of change was 1.6%, down from its January high of 4.0%. All of the four component series (employment, income, production and sales) contributed to the May increase.

The lagging indicator index rose 0.3% in May, the fifth increase in the last six months. The gain was led by higher C&I loans offset by a longer average duration of unemployment. The ratio of coincident-to-lagging indicators, which tends to "lead" the "leaders" fell for the third month in the last four to 94.3%.

The Conference Board figures are available in Haver's BCI database; the components are available there and most are also in USECON. The expectations figure is the AS1REPNA database. Visit the Conference Board's site for coverage of leading indicator series from around the world.

Business Cycle Indicators(%) May Apr Mar Y/Y 2010 2009 2008
Leading 0.8 -0.4 0.7 5.2 7.8 0.3 -3.1
Coincident 0.1 0.1 0.2 1.8 1.1 -5.4 -1.3
Lagging 0.3 0.5 0.2 2.0 -2.9 -1.9 3.1
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