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Economy in Brief
UK Consumer Sentiment Hits Lowest Reading since 1996
(when the GFK survey began; also lowest reading 'ever')
Of these 13 readings eight of them declined on the month in May three of them improved and two of them were unchanged...
U.S. Existing Home Sales Continue to Fall in April as Houses Become Less Affordable
The combination of soaring home prices across the nation and rising interest rates is making homes less affordable...
U.S. Index of Leading Indicators Fell in April
Five of the index's components fell in April, one was unchanged and four increased...
U.S. Unemployment Claims Rose in the Latest Week
The state insured rates of unemployment in regular programs vary widely...
CBI Gauge in the UK Continues to Be Upbeat
The global economy has a lot of challenges...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits and Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and 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?
by Tom Moeller June 20, 2019
The Conference Board's Composite Index of Leading Economic Indicators held steady (2.5% y/y) during May following a 0.1% April rise, revised from 0.2%. The March increase also was lessened to 0.2% from 0.3%. A 0.1% uptick had been expected in the Action Economics Forecast Survey. The series is comprised of 10 components which tend to precede changes in the overall economy.
The unchanged level of the Leading Indicators series reflected lower readings for initial unemployment insurance claims, the ISM new orders index, and stock prices. The indexes measuring consumer expectations for business/economic conditions, building permits, nondefense capital goods orders and consumer goods orders each rose. Holding steady were the average workweek and the reading of a steeper yield spread between 10-year Treasuries and Fed Funds series.
Three-month growth in the leading index declined to 1.1% (AR), down from the high of 9.1% in December 2017.
The Index of Coincident Economic Indicators rose 0.2% (1.9% y/y) after two months of 0.1% increase. Each of the component series contributed positively to the index change, including the change in personal income less transfer payments, nonagricultural payroll employment, manufacturing & trade sales and industrial production.
Three-month growth in the coincident index of 1.5% (AR) was below 3.1% in December 2018.
The Index of Lagging Economic Indicators declined 0.2% last month (+2.0% y/y) after edging 0.1% lower in April. The average duration of unemployment, commercial & industrial loans outstanding, growth in unit labor costs, the services CPI and the business sector I/S ratio contributed negatively to the index change. The ratio of consumer credit outstanding-to-personal income contributed positively. The average prime rate charged by banks was unchanged for the fourth straight month.
Three-month growth in the lagging index fell sharply to -0.4% (AR) from +5.4% at yearend.
The ratio of coincident-to-lagging economic indicators is sometimes considered a leading indicator of economic activity. It increased to the highest level since December.
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 (%) | May | Apr | Mar | May Y/Y | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Leading | 0.0 | 0.1 | 0.2 | 2.5 | 5.7 | 4.0 | 1.0 |
Coincident | 0.2 | 0.1 | 0.1 | 1.9 | 2.2 | 2.0 | 1.1 |
Lagging | -0.2 | -0.1 | 0.2 | 2.0 | 2.4 | 2.5 | 3.0 |