Global| Feb 21 2006U.S. Leading Economic Indicators Rose
by:Tom Moeller
|in:Economy in Brief
Summary
The composite index of leading economic indicators ticked up 0.1% last month after an upwardly revised 0.6% gain during December which was initially pegged at 0.3%, according to the Conference Board. The uptick fell short of Consensus [...]
The composite index of leading economic indicators ticked up 0.1% last month after an upwardly revised 0.6% gain during December which was initially pegged at 0.3%, according to the Conference Board. The uptick fell short of Consensus expectations for a 0.2% increase.
During the last ten years there has been a 59% correlation between the y/y change in the leading indicators and the lagged change in real GDP.
The breadth of one month gain amongst the 10 components of the leading index backed off to 40% from the sharply improved 75% during December and over the last six months only 40% of the component series rose.
Lower initial claims for unemployment insurance, higher consumer expectations and a higher money supply offset negative contributions from most of the other leading indicator series.
The method of calculating the contribution to the leading index from the spread between 10 year Treasury securities and the Fed funds rate has been revised. A negative contribution will now occur only when the spread inverts rather than when declining as in the past. More details can be found here.
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 increased 0.1% after the upwardly revised 0.2% rise. Over the last ten years there has been a 91% correlation between the y/y change in the coincident indicators and real GDP growth.
The lagging index fell 0.1% after strong gains during the prior three months. That prompted a rise in the ratio of coincident to lagging indicators (a measure of economic excess) for the first time in five months.
Visit the Conference Board's site for coverage of leading indicator series from around the world.
| Business Cycle Indicators | January | December | Y/Y | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|---|
| Leading | 0.1% | 0.6% | -0.1% | 1.2% | 2.5% | 7.1% |
| Coincident | 0.1% | 0.2% | 1.8% | 2.5% | 2.1% | 2.0% |
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.
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