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Economy in Brief

U.S. Leading Economic Indicator Index Rebounds in February
by Tom Moeller  March 18, 2022

• Component changes in leading index are mostly positive.

• Coincident indicators continue to strengthen.

• Lagging indicators hold steady after five straight increases.

The Conference Board's Composite Leading Economic Indicators index increased 0.3% during February (7.6% y/y) after falling 0.5% in January, revised from -0.3%. The gain matched expectations in the Action Economics Forecast Survey. The Leading Index is comprised of 10 components which tend to precede changes in overall economic activity.

Eight of the index's ten components contributed positively to the February increase including the length of the average workweek, initial unemployment insurance claims, factory orders for consumer goods, the ISM factory index, nondefense capital goods orders, stock prices, the leading credit index, and the spread between the 10-year Treasury bond & Fed funds rate. Consumer expectations for business & economic conditions and building permits contributed negatively to the index change.

The Index of Coincident Economic Indicators improved 0.4% (4.0% y/y) during February following a 0.3% January gain, revised from 0.5%. Each of the four components contributed positively to the index change including nonagricultural employment, personal income less transfers, real manufacturing & trade sales and industrial production.

The Index of Lagging Economic Indicators in February were unchanged (1.8% y/y) after rising an unrevised 0.7% in January. The consumer installment/personal income ratio and the services CPI contributed positively to the index last month. The average duration of unemployment, the business inventory-to-sales ratio and C&I loan outstanding contributed negatively to the index change last month. The change in unit labor costs and the average prime rate charged by banks held steady.

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 (%) Feb Jan Dec Feb Y/Y 2021 2020 2019
Leading 0.3 -0.5 0.8 7.6 7.2 -4.1 1.5
Coincident 0.4 0.3 -0.1 4.0 4.0 -3.6 1.1
Lagging 0.0 0.7 0.6 1.8 -2.2 1.1 3.2
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