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Economy in Brief

U.S. Leading Economic Indicators Post Firm Growth
by Tom Moeller  June 18, 2015

The Index of Leading Economic Indicators from the Conference Board posted a 0.7% rise in May (5.7% y/y), the same as during April which was unrevised. A 0.4% increase had been expected in the Action Economics Forecast Survey. The improvement drove three-month growth to 7.1% (AR), its best since July. Ninety percent of the component series rose m/m, the greatest breadth since September. More building permits, a steeper interest rate yield curve, higher stock prices, fewer initial jobless insurance claims and the leading credit index led last month's overall index higher.

The index of coincident indicators improved 0.1% (2.5% y/y) following an unrevised 0.2% rise. Three-month growth held steady at 1.1%, its weakest since March 2013. Nonfarm payroll employment, personal income less transfers and manufacturing & trade sales made positive contributions to the index while industrial production fell.

The lagging indicators index increased 0.2% (3.3% y/y) after a 0.2% gain, revised from 0.1%. Growth of 3.5% during the last three months was down from the March high of 5.7%, suggesting a lessening buildup of economic excess. A higher consumer credit to income ratios contributed the most to last month's increase.

The ratio of coincident-to-lagging indicators is a measure of how the economy is performing versus its excesses. It slipped last month to a new low for the economic expansion.

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 (%) May Apr Mar May Y/Y 2014 2013 2012
Leading 0.7 0.7 0.4 5.7 5.8 3.3 2.1
Coincident 0.1 0.2 0.0 2.5 2.5 1.9 2.6
Lagging 0.2 0.2 0.5 3.3 3.8 3.8 3.1
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