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Economy in Brief

U.S. Leading Economic Indicators Continue to Rise
by Tom Moeller  June 19, 2014

The Index of Leading Economic Indicators, from the Conference Board, improved 0.5% during May (5.9% y/y), the fourth straight month of firm increase. The rise roughly matched expectations in the Action Economics Forecast Survey for a 0.6% gain. The breadth of component gain improved to 89%, its greatest since July 2012. A steeper interest rate yield curve, the leading credit index, lower initial jobless insurance claims and a longer workweek provided the strongest positive contributions to the rise.

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 increased 0.3% (2.3% y/y) following an upwardly revised 0.2% gain. Last month, all of the component series contributed positively to the total's rise. Payroll employment, personal income less transfers, manufacturing & trade sales and industrial production each rose.

The index of lagging economic indicators increased 0.4% last month (4.0% y/y) following a 0.3% April rise. A shorter duration of unemployment and another surge in C&I loans outstanding accounted for most of 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 (%) May Apr Mar Y/Y 2013 2012 2011
Leading 0.5 0.3 1.0 5.9 3.4 2.2 5.3
Coincident 0.3 0.2 0.4 2.3 1.9 2.3 2.6
Lagging 0.4 0.3 0.6 4.0 3.8 3.4 2.3
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