U.S. Leading Economic Indicators Fall in December
by:Tom Moeller
|in:Economy in Brief
Summary
- Index declines for tenth straight month.
- Coincident indicators rise minimally.
- Lagging indicators continue to increase.
The Conference Board's Composite Leading Economic Indicators Index fell 1.0% (-6.0% y/y) during December after declining 1.1% in November, revised from -1.0%. The Action Economics Forecast Survey expected a 0.7% decline in the index for December.
Eight of the Leading Index's ten components made negative contributions to the index change in December. Declining influences came from the average workweek, initial unemployment insurance claims, the ISM new orders index, building permits, stock prices, the interest rate yield curve, consumer expectations for business/economic conditions and the leading credit index.
The Index of Coincident Economic Indicators edged up 0.1% last month (1.8% y/y) following no change in November, revised from a 0.1% rise. Three of the four index components rose minimally including payroll employment, personal income and business sales. Industrial production declined for a third straight month.
The Index of Lagging Economic Indicators increased 0.3% (6.9% y/y) following an unrevised 0.2% increase during November. A rise in the average duration of unemployment, a higher prime rate and rising business inventory/sales ratios contributed positively to the index change while the six-month change in the services CPI contributed negatively.
The ratio of the Coincident index to the Lagging index also is seen as a leading indicator as it measures current economic performance versus excesses. The ratio fell slightly last month and has been steadily declining since December of 2021, suggesting 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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