U.S. Leading Economic Indicators Strengthen in November
by:Tom Moeller
|in:Economy in Brief
Summary
- Most leading index components improve.
- Coincident indicators rise again.
- Lagging indicators ease modestly.
The Conference Board's Composite Leading Economic Indicators index rose 1.1% (9.8% y/y) during November following an unrevised 0.9% October increase. The 0.3% September rise also was unrevised. It was the largest increase in six months and outpaced a 0.9% rise expected in the Action Economics Forecast Survey. The Leading Index is comprised of 10 components which tend to precede changes in overall economic activity.
Eight of the ten index components contributed positively to the November increase including the length of the average workweek, unemployment insurance claims, the ISM orders index, building permits, the interest rate spread between 10-year Treasuries and Fed funds as well as the leading credit index. Orders for consumer goods and materials as well as stock prices also contributed positively. The index of consumer expectations for business & economic conditions fell while real nondefense capital goods orders excluding aircraft held steady.
The Index of Coincident Economic Indicators rose 0.3% (3.6% y/y) in November after an unrevised 0.5% October increase. Stability in September also was unrevised. All four of the component series rose including nonagricultural employment, personal income less transfers, industrial production and real manufacturing & trade sales.
The Index of Lagging Indicators eased 0.1% during November (+0.8% y/y) following a 0.5% October rise, revised from 0.4%. September's increase was revised to 0.9% from 1.0%. The average duration of unemployment, the change in labor costs per unit of output slipped as did the six-month change in the services CPI. The business inventory/sales ratio, commercial & industrial loans outstanding and the consumer installment credit/personal income ratio rose. The banks' prime rate held steady.
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.
More Economy in Brief
