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Economy in Brief

U.S. Leading Indicators Are Strong
by Tom Moeller November 18, 2011

The Conference Board reported that its Leading Economic Indicators index rose 0.9% during October following a 0.1% September rise, revised down from 0.2% reported last month. The gain beat the Consensus forecast for a 0.6% increase. The breadth of the latest index gain was notably wide as 90% of the components rose versus September, the most since December 2009. The rise in the index stemmed from higher building permits, a steeper interest rate yield curve, higher stock prices, stronger money supply growth, longer weekly hours worked, fewer claims for unemployment insurance and improved consumer expectations. Vendor performance provided a negative influence as the speed of deliveries quickened.

Evidence of the economy's weakness also was in the Conference Board's report. The index of coincident indicators ticked up a modest 0.2% after no change during the prior two months. Over the last six months the index rose at a modest 1.4% rate. The 1-month diffusion index of the indicators rose to 100%.

In a sign that economic excesses continued to build, the October lagging indicator index rose 0.6%, its strongest gain since April. The rise was led by more  commercial & industrial loans outstanding as well as the average duration of unemployment. The ratio of coincident-to-lagging indicators, which tends to "lead" the "leaders," fell to its lowest level since February 2010.

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

The National and the Regional Economic Outlook from William C. Dudley, President and Chief Executive of the Federal Reserve Bank of New York can be found here.

Future Recession Risks: An Update from the Federal Reserve Bank of San Francisco is available here.

Business Cycle Indicators (%) Oct Sep Aug Y/Y 2010 2009 2008
Leading 0.9 0.1 0.3 6.6 7.8 0.3 -3.1
Coincident 0.2 0.0 0.0 2.0 1.1 -5.4 -1.3
Lagging 0.6 0.1 0.2 2.5 -2.9 -1.9 3.1
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