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Economy in Brief

U.S. Index of Leading Indicators Increases
by Tom Moeller  April 21, 2016

The Conference Board's Index of Leading Economic Indicators increased 0.2% during March (2.2% y/y), following declines in each of the prior three months. February's 0.1% shortfall was revised from a 0.1% gain. The latest improvement fell short of expectations in the Action Economics Forecast Survey for a 0.3% rise. The three-month change in the index improved to zero, up from -1.9% in February. Fewer building permits and more initial unemployment insurance claims had negative effects on the overall leading index. These influences were offset by higher stock prices, a steeper interest rate yield curve and an improved ISM new orders diffusion index.

The coincident index remained unchanged (1.8% y/y) after an unrevised 0.1% February rise. It was the weakest monthly performance since May. Three-month growth eased to 1.4% (AR), its least since December. Nonfarm payrolls, personal income less transfers and manufacturing & trade sales contributed positively to last month's index, but industrial production fell for the fifth month in six.

The lagging index increased 0.4% (3.8% y/y) after a 0.5% rise, revised from 0.4%. Three-month growth increased to 4.1%, its strongest since November. More C&I loans, a longer duration of unemployment and a higher consumer installment debt/personal income ratio contributed positively to the index rise last month. A weaker gain in the services CPI detracted from the overall index increase.

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 the 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 (%) Mar Feb Jan Mar Y/Y 2015 2014 2013
Leading 0.2 -0.1 -0.2 2.2 4.3 5.8 2.9
Coincident 0.0 0.1 0.3 1.8 2.5 2.6 1.4
Lagging 0.4 0.5 0.1 3.8 3.7 3.7 3.9
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