U.S. Leading Economic Indicators Index Continues to Fall in February
by:Tom Moeller
|in:Economy in Brief
Summary
- Monthly decline is eleventh in a row.
- Coincident indicators post minimal gain.
- Lagging indicators rise modestly.
The Conference Board's Composite Leading Economic Indicators Index fell 0.3% (-6.5% y/y) during February after an unrevised 0.3% January weakening and a 0.8% December drop. The decline matched expectations in the Action Economics Forecast Survey.
Six of the Leading Index's ten components contributed negatively to the index change including the average workweek, initial claims for unemployment insurance, the ISM new orders index, the spread between the 10- Treasury note and the Fed funds rate, consumer expectations for business/economic conditions and the leading credit index.
The Index of Coincident Economic Indicators edged 0.1% higher in February (1.4% y/y) following two consecutive 0.2% increases. Three of the four components of the index made positive contributions to the February increase including payroll employment, personal income less transfers and manufacturing & trade sales. Contributing negatively was industrial production.
The Index of Lagging Economic Indicators increased 0.2% (6.8% y/y) in February after a 0.1% January gain. Four of the index's seven components made positive contributions to the index change including the average duration of unemployment, the business inventory-to-sales ratio, banks’ prime rate and the consumer installment credit-to-income ratio. The change in factory sector unit labor costs, C&I loans outstanding and the change in the services CPI contributed negatively.
The ratio of the Coincident index to the Lagging index suggests economic weakness ahead as it shows how the economy is performing against the excesses that are building. The ratio held steady m/m in February but remained down sharply from its March 2021 high.
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.
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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