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Economy in Brief

U.S. Leading Economic Indicators Increase Moderates
by Tom Moeller   July 21, 2011

The Conference Board reported that its Leading Economic Indicators index rose 0.3% last month following an unrevised 0.8% May increase. Consensus expectations were for a 0.2% rise in June. Despite the latest increases, three-month growth in the series fell to 4.0% (AR) which was down from 7.9% in 2010.

The breadth of increase among the components, measured by the 1-month diffusion index, fell back to 50%, reversing most of its prior improvement. Money supply growth and a steeper interest rate yield spread made the largest contributions to the June increase. Lower consumer expectations and shorter weekly hours worked made the largest negative contributions.

The index of coincident indicators again ticked 0.1% higher in June after an unrevised 0.1% May increase. The three-month annualized rate of change was a negligible 0.4%, down from its January high of 4.0%. All four of the component series (employment, income, production and sales) contributed to the June uptick.

The lagging indicator index rose 0.3% in June, the sixth increase in the last seven months. Like earlier months, the gain was led by higher C&I loans offset by a slower 6-month change in the services CPI. The ratio of coincident-to-lagging indicators, which tends to "lead" the "leaders" fell for the fourth month in the last five to 94.0%.

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(%) Jun May Apr Y/Y 2010 2009 2008
Leading 0.3 0.8 -0.3 6.0 7.8 0.3 -3.1
Coincident 0.1 0.1 -0.1 1.7 1.1 -5.4 -1.3
Lagging 0.3 0.2 0.6 2.3 -2.9 -1.9 3.1
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