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Economy in Brief

U.S. Leading Economic Indicators Continue to Increase
by Tom Moeller  December 21, 2017

The Conference Board's Composite Index of Leading Economic Indicators rose 0.4% during November following an unrevised 1.2% jump during October. A 0.4% rise had been expected in the Action Economics Forecast Survey. Three-month growth in the index held steady at 7.0% (AR).

Performance amongst the components of the leading index was mixed. The ISM new orders index, the interest rate spread between 10-Year Treasuries and Fed funds, consumer expectations for business/economic conditions and stock prices registered positive effects on the index. Initial unemployment insurance claims and building permits contributed negatively. Other series had little effect.

The Index of Coincident Economic Indicators increased 0.3% (2.1% y/y) following an unrevised 0.3% October rise. Each of the component series, including industrial production, personal income less transfer payments, business sales and payroll employment, contributed positively to the index. Three-month growth in the index strengthened to 2.8% (AR), its best since January 2015.

The Index of Lagging Economic Indicators ticked 0.1% higher (2.4% y/y) last month following a 0.3% October rise, revised from 0.2%. A longer average duration of unemployment had a sharp positive effect on the index, as it did in October. Commercial & industrial loans outstanding also had a positive effect. These influences were countered by a large negative effect from fewer commercial & loans. Three-month growth of 1.3% in the lagging index was reduced from 5.1% during the spring of last year.

The ratio of coincident-to-lagging indicators is often considered to be a leading indicator of economic activity. As economic slack diminishes relative to current performance, the ratio will rise. It improved last month to the highest level in six months.

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 (%) Nov Oct Sep Nov Y/Y 2016 2015 2014
Leading 0.4 1.2 0.1 5.5 1.2 4.4 5.6
Coincident 0.3 0.3 0.1 2.1 1.6 2.3 2.5
Lagging 0.1 0.3 -0.1 2.4 3.4 3.7 3.6
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