Global| Sep 22 2016U.S. Leading Economic Indicators Decline
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board's Composite Index of Leading Economic Indicators fell 0.2% during August (+1.1% y/y) following a 0.5% July gain, revised from 0.4%. It was the first decline in three months. Expectations had been for no change in [...]
The Conference Board's Composite Index of Leading Economic Indicators fell 0.2% during August (+1.1% y/y) following a 0.5% July gain, revised from 0.4%. It was the first decline in three months. Expectations had been for no change in the Action Economics Forecast Survey. The three-month change in the index held steady at 2.3% (AR), but was below its peak growth of 7.1% roughly one year ago.
Contributing negatively to the index last month were a shorter factory sector workweek, more initial claims for jobless insurance, a lower ISM new orders index, fewer nondefense capital goods orders and fewer building permits. These declines were offset by positive readings from a gain in stock prices, a steeper interest rate yield curve and the leading credit index.
The coincident index improved 0.1% (1.6% y/y) following a 0.3% increase, revised from 0.4%. Three-month growth of 2.5% (AR) was the strongest since September. Nonfarm payrolls, personal income less transfers and manufacturing & trade sales contributed positively to the index. Industrial production contributed negatively for the first time in three months.
The lagging index rose 0.2% (3.0% y/y) after a 0.2% gain, revised from 0.1%. Three-month growth weakened further to 0.7% versus a 5.1% high three months ago. The average duration of unemployment, higher consumer credit-to-income ratio and a higher services CPI had the largest positive effects on the total index last month. Offsetting these gains were fewer commercial & industrial loans outstanding.
The ratio of coincident-to-lagging indicators also is a leading indicator of economic activity. It measures excesses in the economy relative to its ongoing performance. This ratio reversed July's increase.
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 (%) | Aug | Jul | Jun | Aug Y/Y | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Leading | -0.2 | 0.5 | 0.2 | 1.1 | 4.3 | 5.8 | 2.9 |
| Coincident | 0.1 | 0.3 | 0.3 | 1.6 | 2.5 | 2.6 | 1.4 |
| Lagging | 0.2 | 0.2 | -0.2 | 3.0 | 3.7 | 3.7 | 3.9 |
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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