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Economy in Brief

U.S. Leading Economic Indicators Show Further Improvement
by Tom Moeller  December 18, 2014

The Index of Leading Economic Indicators from the Conference Board increased 0.6% last month following a 0.6% October gain, revised from 0.9%. Eighty percent of the component series improved m/m and 95% of the series are higher versus six months ago. A steeper interest rate yield curve, an improved ISM New Orders index, higher stock prices, more orders for nondefense capital goods and the leading credit index led the way upward. Declines in the components included more initial claims for unemployment insurance and fewer building permits. A 0.5% increase had been expected in the Action Economics Forecast Survey.

The index of coincident indicators improved 0.4% (2.6% y/y) following a 0.2% increase, revised from 0.1%. All of the component series increased last month including industrial production, nonfarm payroll employment, personal income less transfers and business sales.

The lagging indicators index increased 0.3% (3.9% y/y) following no change in October, revised from -0.1%. During the last three months, growth has slowed to 1.6% (AR) from 5.7% as of March, suggesting that the buildup of  economic excess has slowed. More C&I loans outstanding accounted for most of last month's increase, followed by a higher consumer installment  credit/income ratio. These were offset by lower figures for the duration of unemployment and a lessened change in the services CPI.

The index of coincident-to-lagging indicators is a measure of how the economy is performing versus its excesses. It improved last month for the fourth time in the last five months.

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 (%) Nov Oct Sep Y/Y 2013 2012 2011
Leading 0.6 0.6 0.8 6.1 3.5 2.2 5.3
Coincident 0.4 0.2 0.3 2.6 1.9 2.3 2.6
Lagging 0.3 0.0 0.1 3.9 3.8 3.4 2.3
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