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Economy in Brief

U.S. Leading Economic Indicator Gain Improves
by Tom Moeller  July 20, 2017

The Conference Board's Composite Index of Leading Economic Indicators increased 0.6% (4.0% y/y) during June following a 0.2% May gain, revised from 0.3%. It was the strongest increase since January. A 0.3% rise had been expected in the Action Economics Forecast Survey. Three-month growth improved to 4.5% (AR) versus 3.5% in May.

Most of the component series contributed positively to the leading index last month, including an increased number of building permits, a higher ISM new orders index, a steeper interest rate yield curve, the leading credit index, improved consumer expectations for business & economic conditions and higher stock prices. More initial unemployment insurance claims contributed negatively and the workweek was stable.

The Index of Coincident Economic Indicators rose 0.2% last month (2.0% y/y) after an upwardly revised 0.3% May gain. The latest rise strengthened three-month growth to 2.5% (AR), its best since December. Each of the component series contributed positively to the latest increase, including payroll employment, real personal income less transfers, industrial production and manufacturing & trade sales.

The Index of Lagging Economic Indicators also increased 0.2% during June following an unrevised 0.1% May uptick. Three-month growth held steady at 2.3%. A higher prime rate and a higher consumer installment credit/personal income ratio were offset last month by slower growth in the services CPI and fewer commercial & industrial loans outstanding.

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 has been fairly steady since early last year.

The Conference Board figures are available in Haver's BCI database; the components are available there, and most are also in USECON. The expectations are in the AS1REPNA database. Visit the Conference Board's site for coverage of leading indicator series from around the world.

Business Cycle Indicators (%) Jun May Apr Jun Y/Y 2016 2015 2014
Leading 0.6 0.2 0.2 4.0 1.2 4.4 5.6
Coincident 0.2 0.3 0.2 2.0 1.6 2.3 2.5
Lagging 0.2 0.1 0.3 2.4 3.4 3.7 3.6
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