Global| Dec 21 2017U.S. Leading Economic Indicators Continue to Increase
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board's Composite Index of Leading Economic Indicators rose 0.4% during November following an unrevised 1.2% jump during October. A 0.4% rise had been expected in the Action Economics Forecast Survey. Three-month growth [...]
The Conference Board's Composite Index of Leading Economic Indicators rose 0.4% during November following an unrevised 1.2% jump during October. A 0.4% rise had been expected in the Action Economics Forecast Survey. Three-month growth in the index held steady at 7.0% (AR).
Performance amongst the components of the leading index was mixed. The ISM new orders index, the interest rate spread between 10-Year Treasuries and Fed funds, consumer expectations for business/economic conditions and stock prices registered positive effects on the index. Initial unemployment insurance claims and building permits contributed negatively. Other series had little effect.
The Index of Coincident Economic Indicators increased 0.3% (2.1% y/y) following an unrevised 0.3% October rise. Each of the component series, including industrial production, personal income less transfer payments, business sales and payroll employment, contributed positively to the index. Three-month growth in the index strengthened to 2.8% (AR), its best since January 2015.
The Index of Lagging Economic Indicators ticked 0.1% higher (2.4% y/y) last month following a 0.3% October rise, revised from 0.2%. A longer average duration of unemployment had a sharp positive effect on the index, as it did in October. Commercial & industrial loans outstanding also had a positive effect. These influences were countered by a large negative effect from fewer commercial & loans. Three-month growth of 1.3% in the lagging index was reduced from 5.1% during the spring of last year.
The ratio of coincident-to-lagging indicators is often considered to be a leading indicator of economic activity. As economic slack diminishes relative to current performance, the ratio will rise. It improved last month to the highest level in six months.
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 (%) | Nov | Oct | Sep | Nov Y/Y | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| Leading | 0.4 | 1.2 | 0.1 | 5.5 | 1.2 | 4.4 | 5.6 |
| Coincident | 0.3 | 0.3 | 0.1 | 2.1 | 1.6 | 2.3 | 2.5 |
| Lagging | 0.1 | 0.3 | -0.1 | 2.4 | 3.4 | 3.7 | 3.6 |
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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