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Economy in Brief

Index of Leading Indicators Rose Again in August
by Sandy Batten  September 23, 2021

• Nine of 10 components contributed to August increase.

• Coincident indicators continued to rise despite impact of Delta variant.

• Lagging indicators rose, but at a slower pace.

The Conference Board's Composite Index of Leading Economic Indicators increased 0.9% m/m (10.0% y/y) in August following a slightly downwardly revised 0.8% m/m gain in July (initially 0.9%) and an upwardly revised 0.6% m/m rise in June (previously 0.5%). A 0.7% rise in August 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 August increase points to strong overall economic growth ahead.

Nine of the 10 components contributed to the August increase with fewer unemployment claims, an increase in the ISM orders diffusion index and a rise in building permits making the three largest contributions. The drop in consumer expectations was the only component to subtract from the overall gain in August.

The Index of Coincident Economic Indicators increased 0.2% m/m (4.0% y/y) in August versus an unrevised 0.6% m/m gain in July and an upwardly revised 0.5% m/m increase in June (previously 0.4%). Each of the index's four components contributed to the August, led by gains in nonagricultural employment and industrial production.

The Index of Lagging Indicators edged up 0.1% m/m (-1.1% y/y) in August following a downwardly revised 0.5% m/m gain in July (previously 0.6%). Three of the index's seven components made positive contributions to the August gain, while three subtracted and one was neutral.

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 (%) Aug Jul Jun Aug Y/Y 2020 2019 2018
Leading 0.9 0.8 0.6 10.0 -4.9 1.6 5.6
Coincident 0.2 0.6 0.5 4.0 -4.3 1.6 2.4
Lagging 0.1 0.5 -0.1 -1.1 1.0 2.8 2.5
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