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Economy in Brief

U.S. Leading Indicators Continue Upward
by Tom Moeller December 22, 2011

The Conference Board reported that its Leading Economic Indicators index rose 0.5% during November following an unrevised 0.9% October jump. The gain beat the Consensus forecast for a 0.3% increase. The breadth of increase amongst the leader's components continued wide as 70% rose versus October. The rise in the index reflected a steeper interest rate yield curve, higher building permits, stronger money supply growth, higher stock prices, fewer claims for unemployment insurance and improved consumer expectations. Vendor performance provided a negative influence as the speed of deliveries quickened. Also, average weekly hours fell as did factory orders for consumer goods.

Evidence of current economic weakness also was in the Conference Board's report. The index of coincident indicators ticked up just 0.1% after a 0.2% October rise. As calculated by the Conference Board, the index rose at a moderate 1.6% rate during the last six months. The 1-month diffusion index of the indicators slipped to 75% as payroll employment, real personal income and business sales rose but industrial production fell.

In a sign that the buildup of economic excesses eased, the November lagging indicator index rose just 0.1%. The ratio of coincident-to-lagging indicators, which tends to "lead" the "leaders," was unchanged at 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.

Business Cycle Indicators (%) Nov Oct Sep Y/Y 2010 2009 2008
Leading 0.5 0.9 0.1 5.9 7.8 0.3 -3.1
Coincident 0.1 0.2 0.1 2.0 1.1 -5.4 -1.3
Lagging 0.1 0.6 0.1 2.8 -2.9 -1.9 3.1
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