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Economy in Brief

U.S. Leading Economic Index Declines
by Tom Moeller  October 22, 2015

The Conference Board's Leading Economic Index declined 0.2% during September following two months of remaining unchanged. The August figure was revised from 0.1%. The Action Economics Forecast Survey had anticipated no change in September. Three-month growth in the index deteriorated to -0.6% (AR) and was down from 6.7% in June. The largest positive contributions to the latest rise came from a steeper interest rate yield curve, the leading credit index and fewer initial claims for unemployment insurance. These were offset by lower stock prices, fewer building permits, a shorter average workweek and a lower ISM new orders diffusion index.

The coincident economic index improved 0.2% after an unrevised 0.1% uptick. The three-month growth rate held steady at 2.2%, up from 0.7% in May. As in August, 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 series increased 0.5% after a 0.1% uptick, revised from 0.2%. Three-month growth in the index eased to 4.1%. A longer average duration of unemployment, a stronger services CPI and a firmer consumer installment/income ratio had the largest positive contributions to the index. Fewer commercial & industrial loans outstanding had an offsetting negative contribution.

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 September, the ratio fell to another 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 (%) Sep Aug Jul Sep Y/Y 2014 2013 2012
Leading -0.2 0.0 0.0 3.4 5.8 3.3 2.1
Coincident 0.2 0.1 0.3 2.2 2.5 1.9 2.6
Lagging 0.5 0.1 0.4 4.0 3.8 3.8 3.1
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