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Economy in Brief

U.S. Leading Economic Index Posts Firm Increase
by Tom Moeller  November 19, 2015

The Conference Board's Leading Economic Index increased 0.6% during October following two months of slight decline. September's 0.1% dip was revised from -0.2%. The Action Economics Forecast Survey called for a 0.4% October rise. Three-month growth in the index recovered to 2.0% (AR) but it remained down from 6.7% in June. The largest positive contributions to the latest rise came from a steeper interest rate yield curve, higher stock prices, more building permits, an improved leading credit index and fewer initial claims for unemployment insurance. These were offset by a weaker ISM new orders index.

The coincident economic index improved 0.2% after a 0.1% uptick, revised from 0.2%. The three-month growth rate eased to 1.8%, down from 2.5% in August. Nonfarm payroll employment, personal income less transfers and manufacturing & trade sales made positive contributions to the index while industrial production contributed negatively for a second straight month.

The lagging indicators series gained 0.2% after a 0.6% increase, revised from 0.5%. Three-month growth in the index eased to 3.8%, down from the 5.6% high three months ago. More C&I loans, a higher consumer installment credit/personal income ratio and a stronger services CPI made the largest positive contributions to the index. The average duration of unemployment contributed negatively to the total's rise.

The ratio of coincident-to-lagging indicators is a measure of how the economy is performing versus its excesses. As the coincident and lagging series rose by the same amount in October, the ratio held steady at its 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 (%) Oct Sep Aug Oct Y/Y 2014 2013 2012
Leading 0.6 -0.1 -0.1 3.5 5.8 3.3 2.1
Coincident 0.2 0.1 0.2 2.2 2.5 1.9 2.6
Lagging 0.2 0.6 0.2 4.2 3.8 3.8 3.1
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