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Italy's consumer confidence fell month-to-month...
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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller October 18, 2018
The Conference Board's Composite Index of Leading Economic Indicators increased 0.5% (7.0% y/y) during September following an unrevised 0.4% August gain. A 0.5% rise 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.
Movement amongst the components of the index remained mixed last month. Improvement was paced by a rise in consumer expectations for business/economic conditions, a higher ISM new orders index, the leading credit index and a steeper interest rate spread between 10-Year Treasuries & Fed funds. Initial claims for unemployment insurance, stock prices, orders for nondefense capital goods excluding aircraft, as well as orders for consumer goods & materials also improved. The length of the average workweek for production workers and building permits had negative effects.
Three-month growth in the leading index held steady at 6.7% (AR), but remained below its 10.3% December 2017 peak.
The Index of Coincident Economic Indicators increased a lessened 0.1% (2.4% y/y) in September. Each of the index components contributed positively, but minimally, to 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 1.9% (AR) remained improved from 1.6% growth early in the year, but below its 3.6% peak as of December.
The Index of Lagging Economic Indicators eased 0.1% last month (+2.4% y/y) following an unrevised 0.2% August gain. The average prime rate charged by banks and the ratio consumer installment credit-to-income contributed positively to the index change. The average duration of unemployment, the change in unit labor costs, the change in commercial & industrial loan outstanding and the change in the services CPI contributed negatively to the index change. The ratio of business inventories-to-sales had no effect on the index change.
The three-month change in the lagging index fell to -0.4%, down from a high of 5.1% growth in February.
The ratio of coincident-to-lagging indicators is often considered to be another leading indicator of economic activity. As economic slack diminishes relative to current performance, the ratio will rise. It improved slightly to 99.1 last month.
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.
Modernizing Monetary Policy Rules from St. Louis Fed President & CEO James Bullard is available here.
Business Cycle Indicators (%) | Sep | Aug | Jul | Sep Y/Y | 2017 | 2016 | 2015 |
---|---|---|---|---|---|---|---|
Leading | 0.5 | 0.4 | 0.7 | 7.0 | 4.1 | 1.2 | 4.2 |
Coincident | 0.1 | 0.3 | 0.1 | 2.4 | 1.8 | 1.3 | 2.2 |
Lagging | -0.1 | 0.2 | -0.2 | 2.4 | 2.6 | 2.9 | 3.7 |