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Economy in Brief

U.S. Leading Economic Indicators Gain Is Steady & Firm
by Tom Moeller  March 17, 2017

The Conference Board's Composite Index of Leading Economic Indicators increased 0.6% (3.1% y/y) during February, the same as during the prior two months. A 0.3% rise had been expected in the Action Economics Forecast Survey.

A steeper interest rate yield curve had the largest positive effect on the leading index, along with a higher ISM new orders index. Fewer initial claims for unemployment insurance followed along with higher stock prices. Improved consumer expectations for business/economic conditions and the leading credit index also added to the index's gain, but fewer building permits contributed negatively.

The Index of Coincident Economic Indicators increased 0.3% (2.0% y/y) after a 0.1% rise in January. It raised the three-month rate of growth to 3.2% (AR), its swiftest since January 2015. Each of the index component series contributed positively to last month's rise, including payroll employment, real personal income less transfers, manufacturing & trade sales and industrial production.

The Index of Lagging Economic Indicators rose 0.2% (2.7% y/y) after a 0.2% gain. The ratio of consumer installment credit to personal income accounted for the increase while the number of commercial & industrial loans outstanding contributed negatively.

The ratio of coincident-to-lagging indicators also is a leading indicator of economic activity. It measures excesses in the economy relative to its ongoing performance. This ratio increased slightly m/m from its record low.

The Conference Board figures are available in Haver's BCI database; the components are available there, and most are also in USECON. The expectations are in the AS1REPNA database. Visit the Conference Board's site for coverage of leading indicator series from around the world.

Business Cycle Indicators (%) Feb Jan Dec Feb Y/Y 2016 2015 2014
Leading 0.6 0.6 0.6 3.1 1.2 4.4 5.6
Coincident 0.3 0.1 0.4 2.0 1.6 2.3 2.5
Lagging 0.2 0.2 0.3 2.7 3.4 3.7 3.6
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