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Economy in Brief
Import and Export Prices Increase
Import prices rose 0.2% during November (-1.3% y/y)...
U.S. Business Inventories Rise While Sales Slip
Total business inventories increased 0.2% (3.1% y/y) during October...
Friday 13 of December 2019: An unlucky day for Japan’s Tankan
The manufacturing barometer, which is considered the bellwether of this index, fell to zero in Q4 2019 from 5 in Q3...
U.S. Financial Accounts Show Larger Government Borrowing, Somewhat Less Household Borrowing
Total borrowing in U.S. financial markets rose to $4,266 billion in Q3 2019...
U.S. Producer Prices Are Unexpectedly Tame; Core Prices Weaken
The Producer Price Index for final demand was unchanged during November (1.1% y/y)...
by Tom Moeller July 18, 2019
The Conference Board's Composite Index of Leading Economic Indicators fell 0.3% (+1.6% y/y) during June following unrevised stability in May. It was the first decline in six months. 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 decline in the Leading Indicators reflected lower readings for several component series. The readings for initial unemployment insurance claims, the ISM new orders index, building permits, the yield spread between 10-year Treasuries and Fed Funds fell. Offsetting these declines was improvement in the average workweek, consumer goods orders, new orders for nondefense capital goods, stock prices and consumer expectations for business & economic conditions.
Three-month growth in the leading index declined to -0.7% (AR), down from the high of 9.1% in December 2017.
The Index of Coincident Economic Indicators inched 0.1% higher (1.6% y/y) during June after a 0.2% increase. The rise reflected gains in personal income less transfer payments, nonagricultural payroll employment and manufacturing & trade sales. Industrial production fell.
Three-month growth in the coincident index improved to 1.1% (AR), but remained below 3.1% in December of last year.
The Index of Lagging Economic Indicators strengthened 0.6% last month (2.6% y/y) after edging 0.2% lower in May. The average duration of unemployment surged as well as commercial & industrial loans outstanding. The ratio of consumer credit outstanding-to-personal income also contributed positively to the lagging index. Growth in unit labor costs and the gain in the services CPI contributed negatively to the index change and the average prime rate charged by banks held steady for the fifth straight month.
Three-month growth in the lagging index rose slightly to 1.5% (AR), but remained below 5.4% at yearend 2018.
The ratio of coincident-to-lagging economic indicators is sometimes considered a leading indicator of economic activity. It declined to the lowest level since early 1975.
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.
Why Is Inflation Low Globally? from the Federal Reserve Bank of San Francisco is available here.
Business Cycle Indicators (%) | Jun | May | Apr | June Y/Y | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Leading | -0.3 | 0.0 | 0.1 | 1.6 | 5.7 | 4.0 | 1.0 |
Coincident | 0.1 | 0.2 | 0.0 | 1.6 | 2.2 | 2.0 | 1.1 |
Lagging | 0.6 | -0.2 | 0.0 | 2.6 | 2.4 | 2.5 | 3.0 |