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Economy in Brief

U.S. Leading Economic Indicator Strength Revives
by Tom Moeller

Strength in the Conference Board's Index of Leading Economic Indicators revived during March. The index rose 1.4% following moderate gains during the prior two months which were, however, upwardly revised from the preliminary reports. The three-month rate of increase recovered to 9.7% (AR). The leading index is based on actual reports for eight economic data series. The Conference Board initially estimates two series, consumer and capital goods orders.

The breadth of increase amongst the component leading series also recovered last month and seven of the ten components rose. That still was down, however, from even broader-based gains during December. Prominent in last month's increase was a longer workweek, a steeper interest rate yield curve, higher building permits, slower vendor performance and lower claims for jobless insurance.

Continuing to suggest just modest growth currently was another 0.1% increase in the coincident indicators. The three-month change of 0.8% was diminished from its December peak of 2.0%. Slight increases in all four of the component series including industrial production, real personal income, business sales and payroll employment contributed to last month's increase.

The lagging index rose slightly for the second month since January 2009. Higher C&I loans and higher factory sector labor costs were behind the increase. The ratio of coincident-to-lagging indicators (another leading indicator) was stable for the third month following ten months of increase.

The Conference Board figures are available in Haver's BCI database. Visit the Conference Board's site for coverage of leading indicator series from around the world. The latest U.S. Leading Indicators release can be found here.

The latest FedViews from the Federal Reserve Bank of San Francisco is available here.

Business Cycle Indicators (%) March February January Nov. 6-Month%(AR) 2009 2008 2007
Leading 1.4 0.4 0.6 8.9 0.4 -2.8 -0.4
Coincident 0.1 0.1 0.0 1.2 -5.1 -1.2 1.4
Lagging 0.2 0.1 -0.3 -4.0 -1.6 3.2 3.0
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