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Economy in Brief

U.S. Leading Economic Indicators Rise
by Tom Moeller  August 22, 2013

The index of Leading Economic Indicators, published by the Conference Board, increased 0.6% last month (3.1% y/y). The gain was the strongest since April and followed an unrevised no-change during June. A 0.5% rise had been expected for July in the Action Economics Forecast Survey. The breadth of component increase improved last month. Eighty percent of the component series had a positive influence on the index, the most since February. A steeper interest rate yield curve and the leading credit index had the largest positive influences on the total. These were followed by higher stock prices, more building permits and an increased ISM new orders index. Offsetting the gains were a shorter workweek and a slip in nondefense capital goods orders.

The index of coincident indicators rose 0.2% (1.9% y/y) after a downwardly revised 0.1% June gain. Each of the component series - payroll employment, personal income less transfers, manufacturing & trade sales and industrial production - increased.

The index of lagging economic indicators fell 0.2% (2.4% y/y) following a downwardly revised 0.2% June rise. The slip suggested that economic excesses eased last month. Fewer C&I loans outstanding, a shorter duration of unemployment and an easier increase in the services CPI had the largest dampening impacts on the overall series.

Another leading economic series is the ratio of coincident-to-lagging indicators. It measures how the economy is performing versus its excesses. The figure rose last month (-0.6% y/y) to its highest level since December.

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

Business Cycle Indicators (%) Jul Jun May Y/Y 2012 2011 2010
Leading 0.6 0.0 0.3 3.1 2.0 5.1 8.0
Coincident 0.2 0.1 0.3 1.9 2.1 2.4 1.2
Lagging -0.2 0.2 0.3 2.4 3.6 2.7 -3.1
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