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Economy in Brief

U.S. Leading Economic Indicators Suggest Firm Growth Ahead
by Tom Moeller  April 21, 2014

The index of Leading Economic Indicators, published by the Conference Board, increased 0.8% (6.1% y/y) in March following an unrevised 0.5% February gain. A 0.7% rise was expected in the Action Economics Forecast Survey. The breadth of component increase firmed considerably to 70%, its strongest since November. A steeper interest rate yield curve, a longer workweek, fewer initial claims for unemployment insurance, higher stock prices and the leading credit index worked to raise the overall index.

A lower ratio of coincident-to-lagging indicators continued to counter the message of positive economic growth to come. It fell to its lowest level of the economic recovery. The index measures how the economy is performing versus its excesses.

The index of coincident indicators gained 0.2% (2.1% y/y) following an upwardly revised 0.4% February gain. Last month, each of the component series - payroll employment, personal income less transfers, manufacturing & trade sales and industrial production - made positive contributions to the index. The production rebound had the largest positive effect.

The index of lagging economic indicators increased 0.6% last month (3.7% y/y) following a 0.3% February rise. Another surge in C&I loans outstanding, a shorter duration of unemployment and a stronger change in the services CPI had the largest positive impacts on the index.

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 (%) Mar Feb Jan Y/Y 2013 2012 2011
Leading 0.8 0.5 0.2 6.1 3.4 2.2 5.3
Coincident 0.2 0.4 -0.1 2.1 1.9 2.3 2.6
Lagging 0.6 0.3 0.6 3.7 3.8 3.4 2.3
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