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Economy in Brief

U.S. Leading Economic Indicators Point Toward Improved Economic Growth
by Tom Moeller  May 22, 2014

The first quarter's economic stagnancy looks to have been a hiccup, according the Index of Leading Economic Indicators. The Conference Board reported that the index advanced 0.4% last month, the third month of firm increase following two of little change. The increase matched expectations in the Action Economics Forecast Survey. The breadth of component gain was a lessened 60%. A steeper interest rate yield curve and more building permits accounted for most of the index rise last month followed by the leading credit index and new orders for consumer goods.

A lower ratio of coincident-to-lagging indicators continued to temper the message of positive economic growth to come. It slipped to its lowest level of the economic recovery. The index measures how the economy is performing versus its excesses.

The index of coincident indicators nudged 0.1% higher (2.1% y/y) following 0.3% gains in the prior two months. Last month, higher payroll employment, increased personal income less transfers and improved manufacturing & trade sales accounted for the overall index rise. Industrial production pulled the index lower for the first month in the last three.

The index of lagging economic indicators increased 0.2% last month (3.9% y/y) following a 0.7% March rise. Another surge in C&I loans outstanding and a shorter duration of unemployment accounted for the rise.

The Conference Board figures are available in Haver's BCI database; the components are available there, and most are also in USECON. The forecast figures for the Consensus are in the AS1REPNA database. Visit the Conference Board's site for coverage of leading indicator series from around the world.

Business Cycle Indicators (%) Apr Mar Feb Y/Y 2013 2012 2011
Leading 0.4 1.0 0.5 5.8 3.4 2.2 5.3
Coincident 0.1 0.3 0.3 2.1 1.9 2.3 2.6
Lagging 0.2 0.7 0.2 3.9 3.8 3.4 2.3
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