U.S. Index of Leading Indicators Falls in November
by:Tom Moeller
|in:Economy in Brief
Summary
- Leading index declines for 20th consecutive month.
- Coincident Indicator Index edges higher.
- Lagging Economic Index strengthens.
The U.S. Leading Economic Index fell 0.5% in November (-7.6% y/y) after a 1.0% October decline, revised from -0.8%, according to a report released today by The Conference Board. A 0.4% decline had been expected in the Action Economics Forecast Survey. The November index of 103.0 was the lowest level since May 2020.
Six of the index ten indicators made negative contributions to the overall index in November including consumer expectations for the economy, building permits and the ISM new orders index. The length of the average workweek, initial jobless insurance claims and the inverted interest rate yield curve also contributed negatively to the index change. Three of the index’s components made positive contributions including the S&P 500 stock price index, new orders for capital goods and new orders for consumer goods. The leading credit index had no effect on the leading index change.
The 0.2% increase (1.7% y/y) in the Coincident Economic Index in November followed no change during October. All four of the components made positive contributions in November, led by personal income less transfers, followed by industrial production, nonagricultural payroll employment and real manufacturing & trade sales.
The Lagging Economic Index rose 0.5% (1.3% y/y) in November after increasing 0.3% in October. It was the largest increase since December 2022. Four of the index’s seven components made positive contributions last month led by the average duration of unemployment and the change in the services CPI. Two components made negative contributions and one was unchanged.
The ratio of the coincident index to the lagging index is also viewed as a leading indicator. This measure fell 0.3% in November, its second straight monthly decrease. It previously had exhibited a slight uptrend.
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 website for coverage of leading indicator series from around the world.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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