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Economy in Brief

U.S. Leading Economic Index Ticks Higher
by Tom Moeller  September 18, 2015

The Conference Board Leading Economic Index improved 0.1% during August following no change in July, revised from -0.2%. June's 0.6% increase was unrevised. The Action Economics Forecast Survey had anticipated a 0.2% rise. Three-month growth in the index of 2.6% (AR) was down from 7.1% in June. The largest positive contributions to the latest rise came from a steeper interest rate yield curve, more building permits, the leading credit index and firmer consumer expectations for business/economic conditions. These were offset by lower stock prices, more initial unemployment insurance claims, a weaker ISM new orders index and fewer nondefense capital goods orders.

The coincident economic index improved 0.1% after a 0.4% July rise, revised from 0.2%. The three-month growth rate of 2.2% was the quickest since February. Nonfarm payroll employment, personal income less transfers and manufacturing & trade sales made positive contributions to the index while industrial production contributed negatively.

The lagging indicators index rose 0.2% following July's unrevised 0.3% increase. The June gain was strengthened to 0.9%. Three-month growth in the index of 5.6% remained amongst the strongest since early-2013. A higher consumer installment credit-to-personal income ratio and a stronger services CPI made the largest positive contributions to the index. The business inventory-to-sales ratio and factory sector unit labor costs also had positive effects but fewer commercial & industrial loans outstanding and the duration of unemployment made negative contributions.

The ratio of coincident-to-lagging indicators is a measure of how the economy is performing versus its excesses. As lagging indicators increased more than the coincident series in August, the ratio eased further to a six-year low.

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 (%) Aug Jul Jun Aug Y/Y 2014 2013 2012
Leading 0.1 0.0 0.6 4.4 5.8 3.3 2.1
Coincident 0.1 0.4 0.1 2.3 2.5 1.9 2.6
Lagging 0.2 0.3 0.9 3.8 3.8 3.8 3.1
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