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Economy in Brief

U.S. Index of Leading Economic Indicators Softened in September
by Kathleen Stephansen, CBE  October 21, 2021

• Only four of the 10 components contributed to the September rise.

• Coincident indicators were flat.

• Lagging indicators posted the strongest gain.

The Conference Board's Composite Index of Leading Economic Indicators increased 0.2% m/m (9.3% y/y) in September, from the slightly downwardly revised gain of 0.8% m/m (10.1% y/y) in August. The August gain was initially reported as 0.9% m/m (10.0% y/y), following a 0.9% m/m rise in July, initially reported as a 0.8% m/m advance.

A 0.4% rise in September 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 September increase points to a softening in overall economic growth ahead.

Four of the 10 components contributed to the September increase: fewer unemployment claims, an increase in the ISM orders diffusion index, a widening in interest rate spreads and a small gain in the leading credit index. A drop in building permits, and smaller drops in the average workweek and consumer expectations on business and economic conditions subtracted from the September gain.

The Index of Coincident Economic Indicators was flat over the month in September (3.4% y/y), with two of the index's four components contributing positively, offsetting the negative contribution from industrial production.

The Index of Lagging Indicators edged up 0.3% m/m (-0.5% y/y) in September. Two of the index's seven components made positive contributions to the September gain, while the other five were largely 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 (%) Sep-21 Aug-21 Jul-21 Y/Y 2020 2019 2018 Jul-21 Jun-21
Leading 0.2 0.8 0.9 9.3 -4.9 1.6 5.6 0.0 0.9 0.5
Coincident 0.0 0.1 0.6 3.4 -4.3 1.6 2.4 0.0 0.6 0.4
Lagging 0.3 0.1 0.4 -0.5 1.0 2.8 2.5 0.0 0.6 0.0
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