Global| Mar 18 2010Gains in U.S. Leading Economic Indicators Weaken
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board's Index of Leading Economic Indicators rose a modest 0.1% last month following an unrevised 0.3% January increase. While still indicating economic recovery, strength in forward momentum has been lost. The three- [...]
The Conference Board's Index of Leading Economic Indicators rose a modest 0.1% last month following an unrevised 0.3% January increase. While still indicating economic recovery, strength in forward momentum has been lost. The three-month rate of increase at 6.8% was its weakest since April. The leading index is based on actual reports for eight economic data series. The Conference Board initially estimates two series, consumer and capital goods orders.
The breadth of increase amongst the component series slipped last month to its lowest since last March. Four of the ten components rose during February versus nearly all of them during December. During the most recent six months, however, all of the series rose. Prominent in last month's increase was a steeper interest rate yield curve and faster growth in the money supply. A shorter workweek, probably weather related, subtracted 0.3 percentage points from the leaders' increase.
Continuing to suggest just modest economic growth was the coincident indicator series which rose 0.1% after no change during January, revised from 0.2%. The three-month change of 0.8% was diminished from its December peak of 2.0%. Increases in industrial production, real personal income and business sales have been modest but compare to sharp declines late in 2008. Declines in payroll employment also have eased considerably.
The lagging index rose for the first time since January 2009. A shorter duration of unemployment and a faster increase in labor costs turned the change positive. The ratio of coincident-to-lagging indicators (another leading indicator) slipped following ten months of increase.
| Business Cycle Indicators (%) | February | January | December | Oct. 6-Month % (AR) | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Leading | 0.1 | 0.3 | 1.2 | 9.8 | 0.4 | -2.8 | -0.4 |
| Coincident | 0.1 | 0.0 | 0.1 | 1.2 | -5.1 | -1.2 | 1.4 |
| Lagging | 0.3 | -0.2 | -0.4 | -4.6 | -1.6 | 3.2 | 3.0 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
