U.S. Index of Leading Indicators Continue to Decline in August
by:Tom Moeller
|in:Economy in Brief
Summary
- Fall is seventh in eight months, raising recession risk.
- Coincident indicators edge higher.
- Lagging indicators continue to increase.
The Conference Board's Composite Leading Economic Indicators Index fell 0.3% (-1.0 y/y) in August following a 0.5% July decline, revised from -0.4%. The Action Economics Forecast Survey expected no change in the Leading Indicators index for last month.
Four of the Leading Index's ten components made negative contributions in August. Declines came from the factory sector workweek, the ISM new orders index, building permits and consumer expectations for business/economic conditions. Initial jobless insurance claims, the slope of the yield curve, nondefense capital goods orders less aircraft, stock prices and the leading credit index contributed positively to the index change. Factory orders for consumer goods held steady.
The Index of Coincident Economic Indicators improved 0.1% (2.2% y/y) in August following a 0.5% July increase, revised from 0.3%. Payroll employment, personal income and business sales made positive contributions to the August increase. Industrial production contributed negatively.
The Index of Lagging Economic Indicators increased 0.7% (7.1% y/y) in August following an unrevised 0.4% July gain. Three of the index's seven components made positive contributions, one made a negative contribution and three were unchanged.
The ratio of the Coincident index to the Lagging index also is seen as a leading indicator. The ratio has been steadily declining since November, another indication of rising recession risks.
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.
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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