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Economy in Brief

U.S. Leading Indicators Continue Their Rise in January
by Tom Moeller  February 22, 2021

• Leading index gains decelerate.

• Breadth of component growth moderates.

• Coincident indicators rise is negligibly.

The Conference Board's Composite Index of Leading Economic Indicators increased 0.5% (-1.5% y/y) during January after rising 0.4% in December, revised from 0.3%. The Action Economics survey anticipated a 0.3% rise. The Leading Index is comprised of 10 components which tend to precede changes in overall economic activity.

Seven of the ten components contributed positively to the index change last month, down modestly from both October and November. Building permits strengthened for the third straight month. The ISM new orders index continued its recent rise. Stock prices increased and the slope of the yield curve series rose sharply. The average workweek lengthened following two months of stability. Consumer expectations for business/economic conditions eased for the third straight month.

The Index of Coincident Economic Indicators increased 0.2% (-3.5% y/y) during January following a 0.1% December uptick, revised from 0.3%. Each of the four component series contributed positively to the index, including payroll employment, industrial production, personal income less transfers and manufacturing & trade sales.

The Index of Lagging Indicators fell 0.6% (-2.1% y/y) following a 0.5% December rise, revised from 0.1%. Fewer C&I loans and a longer average duration of unemployment contributed negatively to the index change.

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 (%) Jan Dec Nov Jan Y/Y 2020 2019 2018
Leading 0.5 0.4 0.9 -1.5 -4.9 1.6 5.6
Coincident 0.2 0.1 0.0 -3.5 -4.3 1.6 2.4
Lagging -0.6 0.5 0.0 -2.1 1.0 2.8 2.5
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