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Economy in Brief

U.S. Leading Economic Indicators Inch Higher M/M and Firm Y/Y
by Tom Moeller  January 23, 2014

The index of Leading Economic Indicators, published by the Conference Board, inched up 0.1% during December. That followed a 1.0% jump in November, revised from 0.8%, and missed the 0.2% expected gain in the Action Economics Forecast Survey. The 5.4% twelve-month gain in the leaders was nearly the strongest since July 2011. The breadth of component increase fell to 55% last month. A steeper interest rate yield curve, an improved ISM new orders index, an increased leading credit index and higher stock prices worked to raise the leading index. Moving it lower were more claims for jobless insurance, fewer building permits, fewer nondefense capital goods orders and worsened consumer expectations for business conditions.

The ratio of coincident-to-lagging indicators, another leading indicator, slipped to 89.2 in December and remained in the weakened range maintained all throughout 2013. It measures how the economy is performing versus its excesses.

The index of coincident indicators rose 0.2% (1.3% y/y) after a 0.4% November increase. The full year gain of 2.0% was the weakest of the last three years. During December, all four component series rose -- payroll employment, personal income less transfers, manufacturing & trade sales and industrial production.

The index of lagging economic indicators improved 0.3% last month (3.9% y/y) following no change in November. For the year, the 3.8% increase was the strongest of the last three. Stronger gains in the ratio of consumer installment credit to personal income and commercial and industrial loans continued to lead the index higher.

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 (%) Dec Nov Oct Y/Y 2013 2012 2011
Leading 0.1 1.0 0.1 5.4 3.4 2.2 5.3
Coincident 0.2 0.4 0.1 1.3 2.0 2.3 2.6
Lagging 0.3 0.0 0.3 3.9 3.8 3.4 2.3
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