Global| May 19 2005Leading Indicators Down Again
by:Tom Moeller
|in:Economy in Brief
Summary
The Composite Index of Leading Economic Indicators reported by the Conference Board fell for the fourth straight month in April. The 0.2% decline followed a downwardly revised 0.6% drop in March. Six-month growth in the leaders fell [...]
The Composite Index of Leading Economic Indicators reported by the Conference Board fell for the fourth straight month in April. The 0.2% decline followed a downwardly revised 0.6% drop in March. Six-month growth in the leaders fell further to -1.0%. Growth in the leaders deeper than -2.5% preceded past US recessions.
During the last ten years there has been a 50% correlation between the six-month change in the leading indicators and the change in real GDP.
The breadth of one month gain amongst the 10 components of the leading index improved markedly to 50% from just 10% in March. Higher building permits and lower claims for unemployment insurance offset negative contributions from stock prices, the yield curve and the money supply.
The leading index is based on eight previously reported economic data series. Two series, orders for consumer goods and orders for capital goods, are estimated.
The coincident indicators rose 0.2% for the second month. Six-month growth in the index was 2.5% and during the last ten years there has been an 84% correlation between six month growth in the coincident indicators and two quarter growth in real GDP.
The lagging indicators rose 0.4% mostly due to higher C&I loans.
The ratio of the coincident to the lagging indicators which measures actual economic performance relative to excess fell for the third month this year.
Visit the Conference Board's site for coverage of leading indicator series from around the world.
New Economy-New Policy Rules? from the Federal Reserve Bank of St. Louis is available here.
| Business Cycle Indicators | April | March | 6-Month Chg | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Leading | -0.2% | -0.6% | -0.5% | 2.9% | 1.3% | 2.2% |
| Coincident | 0.2% | 0.2% | 3.1% | 2.6% | 0.4% | -0.5% |
| Lagging | 0.4% | -0.2% | 0.4% | -2.1% | -1.9% | -2.3% |
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.
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