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Economy in Brief

U.S. Leading Economic Indicators Rebound
by Tom Moeller  March 21, 2019

The Conference Board's Composite Index of Leading Economic Indicators increased 0.2% (3.0% y/y) during February after holding steady in January. A 0.1% rise had been expected in the Action Economics Forecast Survey. Earlier data was revised. The series is comprised of 10 components which tend to precede changes in the overall economy.

The improvement in the Leading Indicators reflected higher stock prices with the leading credit index and building permits also improving. Contributing negatively to the index change were the average workweek, the interest rate spread between 10-Yr. Treasury yields and Fed funds, consumer expectations for business/economic conditions and the ISM new orders index. More claims for unemployment insurance and fewer orders for consumer and capital goods also contributed negatively.

Three-month growth of 0.4% (AR) in the leading index remained sharply below the growth logged during 2017 and 2018.

The Index of Coincident Economic Indicators rose 0.2% (2.5% y/y) in February following a 0.1% January gain. Each of the index components contributed positively to the increase including the change in personal income less transfer payments, industrial production, nonagricultural payroll employment and manufacturing & trade sales.

Three-month growth in the coincident index was steady at 2.7%.

The Index of Lagging Economic Indicators held steady last month (2.7% y/y) following four months of strong increase. The average duration of unemployment contributed negatively to the index, offset by strength in commercial & industrial loans outstanding. Six-month growth in the services CPI as well as several other component series had little or no effect on the index change.

Three-month growth in the lagging index eased to 3.8% (AR), but was stronger than six months earlier.

The ratio of coincident-to-lagging economic indicators is sometimes considered a leading indicator of economic activity. It continued its long-lived sideways movement during February.

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 (%) Feb Jan Dec Feb Y/Y 2018 2017 2016
Leading 0.2 0.0 -0.1 3.0 5.7 4.0 1.0
Coincident 0.2 0.1 0.4 2.5 2.2 2.0 1.1
Lagging 0.0 0.6 0.4 2.7 2.4 2.5 3.0
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