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Economy in Brief

U.S. Leading Economic Indicators Post Another Strong Increase
by Tom Moeller  February 17, 2017

The Conference Board's Composite Index of Leading Economic Indicators increased 0.6% during January (2.5% y/y) following an unrevised 0.5% December gain. Earlier figures were revised slightly higher. A 0.4% increase had been expected in the Action Economics Forecast Survey.

A steeper interest rate yield curve continued to have the largest positive effect on the leading index, followed by more building permits, fewer initial claims for unemployment insurance, a higher ISM new orders index, improved consumer expectations for business/economic conditions and the leading credit index. Other component series had little effect on the total.

The Index of Coincident Economic Indicators ticked 0.1% higher (1.6% y/) after a 0.3% rise in December. A rise in payroll employment, real personal income less transfers and manufacturing & trade sales contributed positively to the index, while industrial production contributed negatively.

The Index of Lagging Economic Indicators rose 0.3% (3.3% y/y) after a 0.5% gain. The average duration of unemployment, the prime rate charged by banks and the ratio of consumer installment credit to personal income contributed positively to the index. The number of commercial & industrial loans outstanding 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 declined 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 (%) Jan Dec Nov Jan Y/Y 2016 2015 2014
Leading 0.6 0.5 0.2 2.5 1.2 4.4 5.6
Coincident 0.1 0.3 0.0 1.6 1.5 2.3 2.5
Lagging 0.3 0.5 0.2 3.3 3.4 3.7 3.6
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