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Economy in Brief

U.S. Leading Indicators Increase Moderates in June
by Tom Moeller  July 22, 2021

• Breadth of leader's increase shrinks.

• Coincident indicators continue to firm.

• Lagging indicators hold steady.

The Conference Board's Composite Index of Leading Economic Indicators increased 0.7% during June (12.0% y/y) following a 1.2% May gain, revised from 1.3%. It was the smallest increase in four months. The 1.3% April increase was unrevised. A 0.9% rise in the June index had been expected in the Action Economics Forecast Survey. The Leading Index is comprised of 10 components which tend to precede changes in overall economic activity.

The lessened increase in the leading index occurred as the length of the factory workweek and building permits fell. Several other components including consumer and capital goods orders, and stock prices rose negligibly. The ISM new orders index, initial unemployment insurance claims, a steeper interest rate yield curve, improved consumer expectations and the leading credit index continued to contribute positively to the leading index change.

The Index of Coincident Economic Indicators increased 0.4% in June (6.7% y/y) following a 0.5% May gain, revised from 0.4%. The index rose 0.1% in April, revised from 0.3%. Each of the four component series contributed positively to the June gain, as they did in May, including industrial production, nonfarm payrolls, personal income and manufacturing & trade sales.

The Index of Lagging Indicators held steady last month (-3.0% y/y) after improving 0.6% in May, revised from -2.2%. That followed an unrevised 3.0% April increase. The consumer installment credit/income ratio and a stronger services CPI were positive. Fewer commercial & industrial loans outstanding, a lessened duration of unemployment and the six-month change in labor costs contributed negatively.

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 (%) Jun May Apr Jun Y/Y 2020 2019 2018
Leading 0.7 1.2 1.3 12.0 -4.9 1.6 5.6
Coincident 0.4 0.5 0.1 6.7 -4.3 1.6 2.4
Lagging 0.0 0.6 3.0 -3.0 1.0 2.8 2.5
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