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Economy in Brief

U.S. Leading Economic Indicators Slow
by Tom Moeller  February 19, 2015

The Index of Leading Economic Indicators from the Conference Board increased 0.2% last month (6.5% y/y) following a 0.4% December gain, revised from 0.5%. A 0.3% rise had been expected in the Action Economics Forecast Survey. The increase was the slowest since August and lowered three-month growth to 4.1% (AR), its weakest since February. Fifty-five percent of the component series improved m/m, the least since August. Improved consumer expectations for business/economic conditions, weekly factory hours-worked and nondefense capital goods orders provided the lift to last month's index. Other component series declined including ISM new orders, the interest rate yield curve, building permits and stock prices.

The index of coincident indicators gained 0.2% (3.1% y/y) following an unrevised 0.2% increase. Three-month growth was steady at a firm 3.7%. Each of the four component series increased last month, including nonfarm payroll employment, personal income less transfers, business sales and industrial production.

The lagging indicators index increased 0.3% (3.1% y/y) following an unrevised 0.3% rise during December. During the last three months, growth of 3.2% was up from 1.8% in November, suggesting a modest buildup of economic excess. Faster growth in labor costs and more C&I loans outstanding accounted for much of last month's increase.

The index of coincident-to-lagging indicators is a measure of how the economy is performing versus its excesses. It slipped last month following two months of stability. Nevertheless, it remained up from the cycle-low.

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 (%) Jan Dec Nov Y/Y 2014 2013 2012
Leading 0.2 0.4 0.3 6.5 5.8 3.3 2.1
Coincident 0.2 0.2 0.5 3.1 2.5 1.9 2.6
Lagging 0.3 0.3 0.3 3.1 3.8 3.8 3.1
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