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Economy in Brief

U.S. Leading Economic Indicators Point Toward Continued Growth
by Tom Moeller  July 18, 2014

The Index of Leading Economic Indicators, from the Conference Board, improved 0.3% during June (6.3% y/y), the fifth straight month of firm increase. The June gain fell short of expectations for a 0.5% increase in the Action Economics Forecast Survey but May's increase was revised up to 0.7%. The breadth of component increase slipped to a still-firm 65%. A steeper interest rate yield curve, the leading credit index, and higher stock prices provided the strongest positive contributions to the rise. Detracting from the index's gain were fewer building permits and more initial unemployment insurance claims

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 0.2% (2.3% y/y) following an unrevised 0.3% gain. Last month, all of the component series contributed positively to the total's rise. Payroll employment provided the greatest lift, followed by personal income less transfers, manufacturing & trade sales and industrial production.

The index of lagging economic indicators increased 0.5% last month following a revised 0.3% May rise. The 4.3% y/y rate of growth nearly matched the strongest 12-month increase reached early last year. A shorter duration of unemployment, another surge in C&I loans outstanding and a higher consumer credit-to-income ratio accounted for most of June's 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.

The latest Beige Book from the Federal Reserve covering regional economic conditions can be found here.

Business Cycle Indicators (%) Jun May Apr Y/Y 2013 2012 2011
Leading 0.3 0.7 0.3 6.3 3.4 2.2 5.3
Coincident 0.2 0.3 0.2 2.3 1.9 2.3 2.6
Lagging 0.5 0.3 0.4 4.3 3.8 3.4 2.3
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