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Economy in Brief

U.S. Index of Leading Economic Indicators Continues to Decline in October
by Tom Moeller  November 18, 2022

• Index falls for eighth straight month.

• Coincident indicators continue to rise.

• Lagging indicators edge higher.

The Conference Board's Composite Leading Economic Indicators Index fell 0.8% (-2.7% y/y) during October after a 0.5% September decline, revised from -0.4%. The Action Economics Forecast Survey expected a 0.4% decline in the index for October.

Six of the Leading Index's ten components made negative contributions to the index change in October. Declines came from initial unemployment insurance claims, the ISM new orders index, building permits, stock prices, consumer expectations for business/economic conditions and the leading credit index.

The Index of Coincident Economic Indicators improved 0.2% last month (2.1% y/y) after it edged up an unrevised 0.1% in September. Three of the four index components rose including payroll employment, personal income and business sales. Industrial production declined.

The Index of Lagging Economic Indicators edged 0.1% higher last month (6.9% y/y) following a 0.8% September gain, revised from 0.6%. A rise in banks' prime rate was offset by a decline in the average duration of unemployment and the 6-month change in the services CPI.

The ratio of the Coincident index to the Lagging index also is seen as a leading indicator. The ratio has been steadily declining since November, suggesting rising recession risks.

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.

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