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Economy in Brief

U.S. Leading Economic Indicators Firm
by Tom Moeller  May 19, 2016

The Conference Board's Composite Index of Leading Economic Indicators increased 0.6% during April (1.9% y/y), following an unrevised 0.2% March gain. It was the largest increase since June, and beat expectations for a 0.3% rise in the Action Economics Forecast Survey. The three-month change in the index improved to 2.3% (AR). A longer workweek, fewer initial claims for jobless insurance, more building permits, higher stock prices, a steeper interest rate yield curve and the leading credit index had the largest positive effects on the index. Weaker consumer expectations for business & economic conditions had the only negative contribution.

The coincident index increased 0.3% (1.8% y/y) after zero change. April's gain was the largest monthly in three months. Three-month growth improved to zero (AR) after being slightly negative. Nonfarm payrolls, personal income less transfers, manufacturing & trade sales and industrial production each contributed positively to the index.

The lagging index increased 0.3% (4.1% y/y) after an unrevised 0.4% gain. Three-month growth increased to 6.8%, its strongest in three years. 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.

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 since 1975.

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.

How Did the Great Recession Affect Payday Loans? from the Federal Reserve Bank of Chicago is available here.

Business Cycle Indicators (%) Apr Mar Feb Apr Y/Y 2015 2014 2013
Leading 0.6 0.2 -0.1 1.9 4.3 5.8 2.9
Coincident 0.3 0.0 0.1 1.8 2.5 2.6 1.4
Lagging 0.3 0.4 0.5 4.1 3.7 3.7 3.9
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