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Economy in Brief

U.S. Leading Economic Indicators Hold Steady
by Tom Moeller  December 22, 2016

The Conference Board's Composite Index of Leading Economic Indicators remained unchanged during November (0.7% y/y) following an unrevised 0.1% October uptick. A 0.2% rise had been expected in the Action Economics Forecast Survey. The six-month change in the index improved to 2.0% (AR)

Contributing positively to the index last month were initial unemployment insurance claims, a steeper interest rate yield curve, nondefense capital goods orders, factory orders for consumer goods, stock prices, consumer expectations for business/economic conditions, stock prices and the leading credit index. Contributing negatively were the average workweek, building permits, a lower ISM new orders diffusion index and more initial claims for unemployment insurance.

The coincident index increased 0.1% (1.7%) following a 0.2% increase, revised from 0.1%. Six-month growth improved to 2.1%. Nonfarm payrolls, personal income less transfers and manufacturing & trade sales contributed positively to the index change. Industrial production contributed negatively.

The lagging index rose 0.3% (2.8% y/y) after an unrevised 0.2% gain. Six-month growth fell to 2.1% versus a 4.9% high early last year. The average duration of unemployment, change in commercial & industrial loans outstanding, the consumer installment credit/income ratio and the business I/S ratio contributed positively to the index. The six-month change in the services CPI and the six-month change in labor costs contributed negatively.

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 eased m/m to a record low.

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 (%) Nov Oct Sep Nov Y/Y 2015 2014 2013
Leading 0.0 0.1 0.3 0.7 4.3 5.8 2.9
Coincident 0.1 0.2 0.2 1.7 2.5 2.6 1.4
Lagging 0.3 0.2 0.2 2.8 3.7 3.7 3.9
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