Global| Jun 23 2016U.S. Leading Economic Indicators Fall
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board's Composite Index of Leading Economic Indicators fell 0.2% during May (+1.2% y/y), following an unrevised 0.6% April increase. The decline was the first since January, and disappointed expectations for a 0.2% rise [...]
The Conference Board's Composite Index of Leading Economic Indicators fell 0.2% during May (+1.2% y/y), following an unrevised 0.6% April increase. The decline was the first since January, and disappointed expectations for a 0.2% rise in the Action Economics Forecast Survey. The three-month change in the index eased to 2.0% (AR) versus its peak growth of 7.1% roughly one year ago. Higher initial claims for unemployment insurance had the largest negative impact on the total index followed by declines in stock prices and in consumer expectations for business/economic conditions. These were offset by a steeper interest rate yield curve and slight gains in most other component series.
The coincident index remained unchanged (1.7% y/y) following a 0.2% rise, revised from 0.3%. Three-month growth deteriorated to 0.7% (AR). Industrial production had a negative effect on the total, while nonfarm payrolls, personal income less transfers and manufacturing & trade sales contributed positively to the index.
The lagging index increased 0.3% (4.2% y/y) after a downwardly revised 0.2% gain. Three month growth eased to a still strong 4.7%. A longer duration of unemployment, a higher consumer installment debt/personal income ratio and more C&I loans had the largest positive impacts on the index. Growth in labor costs contributed negatively.
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 continued a decline to the lowest level since 1961.
The Conference Board figures are available in Haver's BCI database; the components are available there, and most are also in USECON. The forecast figures for the Consensus are in the AS1REPNA database. Visit the Conference Board's site for coverage of leading indicator series from around the world.
| Business Cycle Indicators (%) | May | Apr | Mar | May Y/Y | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Leading | -0.2 | 0.6 | 0.1 | 1.2 | 4.3 | 5.8 | 2.9 |
| Coincident | 0.0 | 0.2 | 0.0 | 1.7 | 2.5 | 2.6 | 1.4 |
| Lagging | 0.3 | 0.2 | 0.6 | 4.2 | 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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