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Economy in Brief

U.S. Leading Indicators Point Toward Continued Recovery
by Tom Moeller  February 17, 2012

The Conference Board reported that the Leading Economic Indicator index gained 0.4% during January following a revised 0.5% December rise, last month reported as 0.4%. A 0.5% increase had been expected. The latest rise pulled the six-month annualized rate of growth up to 1.1% after having been negative late last year. Last month 70% of the component series rose, a two-to-three fold improvement from last Summer. A steeper interest rate yield curve, a longer workweek and higher stock prices provided the bulk of last month's index rise. The separate Leading Credit Index declined and indicated tighter conditions versus the easy state of last Summer & Fall.

The index of coincident indicators rose 0.2% following the 0.3% December rise. The 3.2% six-month rate of growth has been steady since July. A greater contribution from improved employment has been behind the latest indicator gains. Gains in business sales and personal income have been slow and steady while industrial production growth fell.

The index of lagging indicators, designed to measure economic slack, rose 0.4% following a 0.3% December rise. During the last six months the series has been rising at a steady 3.6% rate. A shortened average duration of unemployment and a raised ratio of consumer credit versus personal income account for the latest gains.

Another leading economic series is the ratio of coincident-to-lagging indicators. It measures how the economy is performing versus its excesses and has been slipping since early last year.

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 (%) Jan Dec Nov Y/Y 2011 2010 2009
Leading 0.4 0.5 0.3 3.4 5.1 7.6 -12.8
Coincident 0.2 0.3 0.0 2.0 2.7 2.5 -7.7
Lagging 0.4 0.3 0.3 3.9 1.9 -2.9 -1.0
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