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Economy in Brief

U.S. Index of Leading Indicators Edges Higher
by Tom Moeller  March 17, 2016

The Conference Board's Index of Leading Economic Indicators improved 0.1% during February (2.3% y/y), following declines during the prior two months. The improvement fell short of expectations in the Action Economics Forecast Survey for a 0.2% rise. The three-month change in the index fell to -1.6% (AR), its weakest reading since August 2012. Fewer building permits, lower stock prices, a weaker ISM new orders index, fewer nondefense capital goods orders and lower consumer expectations for business & economic conditions accounted for the decline. These losses were partially offset by a steeper interest rate yield curve, the leading credit index and improved new orders for consumer goods.

The coincident index nudged 0.1% higher (1.8% y/y) after an unrevised 0.3% rise in January. It was the weakest gain in three months. Three-month growth improved, however, to 2.1% (AR), its best since October. Nonfarm payrolls, personal income less transfers and manufacturing & trade sales contributed to last month's rise, but industrial production fell.

The lagging index increased 0.4% (3.8% y/y) after an unrevised 0.1% gain. Three-month growth slowed to 2.0% (AR), the weakest rate since June 2013. More C&I loans, a stronger services CPI and firmer unit labor costs contributed positively to the index rise last month.

The ratio of coincident to lagging indicators also is a leading indicator of economic activity. It measures excesses in the economy relative to its ongoing performance. This ratio declined to its lowest level of the economic expansion.

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 (%) Feb Jan Dec Feb Y/Y 2015 2014 2013
Leading 0.1 -0.2 -0.3 2.3 4.3 5.8 2.9
Coincident 0.1 0.3 0.2 1.8 2.5 2.6 1.4
Lagging 0.4 0.1 0.0 3.8 3.7 3.7 3.9
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