Recent Updates
- Global Supply Chain Pressure Index (Mar, Apr)
- US: Job Openings and Labor Turnover Survey by State (Mar)
- US: New Residential Construction (Apr)
- Canada: CPI (Apr)
- Japan: NCI Economic Activity Index (May)
- more updates...
Economy in Brief
U.S. Mortgage Applications Continued to Slide Amid Higher Rates
The biggest declines have been in refinancing activity, while applications for purchase are just starting to crack...
UK Inflation Jumps
Inflation is at the highest rate since the series began in January of 1989...
U.S. Industrial Production Much Stronger than Expected in April
The increase in manufacturing output in April was once again led by motor vehicle and parts production...
U.S. Retail Sales Posted Solid Rise in April
Notwithstanding falling real incomes and declining confidence measures, consumer spending posted a solid increase...
U.S. Home Builder Index Took a Steep Drop in May
This is the fifth straight month that builder sentiment has declined...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation & Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
"Core" GDP Suggests Economy Gained Momentum in Q1:2022
by Tom Moeller August 17, 2018
The Conference Board's Composite Index of Leading Economic Indicators increased 0.6% (6.3% y/y) during July. The improvement followed an unrevised 0.5% June gain and an upwardly revised 0.1% uptick. A 0.4% increase had been expected in the Action Economics Forecast Survey. The index is comprised of 10 components which tend to precede changes in the overall economy.
Amongst the components of the index, most made a positive contribution. Improvement was led by fewer initial claims for unemployment insurance, the leading credit index, a steeper interest rate spread between 10-Year Treasuries & Fed funds and a higher ISM new orders index. In addition, average consumer expectations for business/economic conditions contributed positively. Also, higher stock prices, more building permits, more orders for consumer goods & materials and an increased number of new orders for nondefense capital goods excluding aircraft had positive effects on the leading index change. The average workweek for production workers had a neutral effect.
Three-month growth in the leading index picked up to 5.2 % (AR), but remained below its 10.3% December 2017 peak.
The Index of Coincident Economic Indicators increased 0.2% (2.4% y/y) in July after a 0.3% June gain. Each of the index components had a positive effect on the index including changes in personal income less transfer payments, industrial production, nonagricultural payroll employment and manufacturing & trade sales.
Three-month growth in the coincident index of 2.3% (AR) has been fairly steady recently and was improved from 1.6% growth in Q1.
The Index of Lagging Economic Indicators declined 0.2% (+2.3% y/y) last month and reversed June's increase. It was the first decline in the index since March. The average duration of unemployment accounted for most of the index decline followed by the change in unit labor cost growth. The prime rate charged by banks and the ratio of consumer installment credit to personal income contributed positively. The other components, including changes in the services CPI as well as commercial & industrial loans outstanding, had neutral effects on the index.
Three-month growth in the lagging index fell to 1.9%, its weakest growth since March and down from 4.3% in June.
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 rose to 99.0 last month and made up declines in two of the prior three 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 (%) | Jul | Jun | May | Jul Y/Y | 2017 | 2016 | 2015 |
---|---|---|---|---|---|---|---|
Leading | 0.6 | 0.5 | 0.1 | 6.3 | 4.1 | 1.2 | 4.2 |
Coincident | 0.2 | 0.3 | 0.1 | 2.4 | 1.8 | 1.3 | 2.2 |
Lagging | -0.2 | 0.2 | 0.5 | 2.3 | 2.6 | 2.9 | 3.7 |