Monday, September 27, 2010

USA Monthly Leading Economic Index at New High in August (Chart) "Recent pace of growth disappointingly slow"

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USA Economy: "Recent pace of growth has been disappointingly slow"


USA Monthly Leading Economic Index +0.3% in August

Official Statement "The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.3 percent in August to 110.2 (2004 = 100), following a 0.1 percent increase in July, and a 0.2 percent decline in June. Says Ken Goldstein, economist at The Conference Board: 'While the recession officially ended in June 2009, the recent pace of growth has been disappointingly slow, fueling concern that the economic recovery could fade and the U.S. could slide back into recession. However, latest data from the U.S. LEI suggest little change in economic conditions over the next few months. Expect more of the same – a weak economy with little forward momentum through 2010 and early 2011.' Says Ataman Ozyildirim, economist at The Conference Board: 'The U.S. LEI, which began rising three months before the end of the recession, remains on a general upward trend. However, the pace has been slowing. Correspondingly, current economic conditions, as measured by The Conference Board CEI, have been essentially flat since May, after reaching a bottom in June 2009. Taken together, the composite indexes are consistent with a slowly expanding economy in the near term.'"

Cycle History The current LEI in August of 110.2 (preliminary) is at a cyclical high. The current LEI is up +12.3 and +12.6% from the cyclical bottom of 97.9 in March 2009.

Trend As noted by The Conference Board, the general trend is upwards. The August LEI of 110.2 (preliminary) is above the 12-month moving average of 108.0. The 12-month moving average has been increasing, ascending, each month in 2010. The August LEI of 110.2 is also above the 24-month moving average of 103.9, which is also increasing.

Chart (Monthly Leading Economic Index) Below is a chart of the latest 25 months of The Conference Board LEI from the August 2008 through the latest month reported, August 2010 (preliminary). As can be seen, the LEI bottomed in March 2009 and the Great Recession officially ended in June 2009. The LEI then began ascending to the current August 2010 peak, although the rate of increase has slowed. Concomitant with the slowing rate of increase in the LEI has been the USA GDP growth being revised downwards for the second half of 2010.


Commentary The August LEI (preliminary) eked out another gain to set a cyclical high of 110.2, subject to revision. The LEI has come a long way from the March 2009 cyclical low of 97.9, so even as the rate of increase has slowed, as evidenced by the above chart, the LEI is still ascending. The LEI did peak in March 2010 and May 2010 but the August 2010 data has now regained and exceeded these peaks.


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USA Consumer Sentiment Drops to 13 Month Low (Chart)
USA Monthly Sales for Retail & Food Services Up +0.4% in August (Chart)
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USA Weekly Leading Index Rises to 4-Week High (Charts)
USA Non-Manufacturing Index (NMI) Contracts -2.8% in August (Chart)
USA Unemployment Rate Edges Up To 9.6% In August (Charts)
USA Manufacturing PMI Expands in August +0.8% (Chart)
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Other Links
The Conference Board TCB
*Data courtesy of The Conference Board*


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