Friday, March 18, 2011

USA Monthly Leading Economic Index Continues Upwards (Chart) "Pointing to economic expansion"


The Conference Board: USA Monthly Leading Index

USA Monthly Leading Economic Index Continues Upwards

Official Statement by The Conference Board NEW YORK, March 17, 2011…The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.8 percent in February to 113.4 (2004 = 100), following a 0.1 percent increase in January, and a 1.0 percent increase in December. Says Ataman Ozyildirim, economist at The Conference Board: “With February’s large gain, the U.S. LEI returned to the strengthening upward trend that began last September. The LEI is pointing to an economic expansion that should gain more momentum in the coming months. In February, improvements in labor markets, financial components, and consumer expectations more than offset falling housing permits.” Says Ken Goldstein, economist at The Conference Board: “Latest data point to an improving economy, one that will continue to gain strength through the summer. The economy continues to encounter strong headwinds. One headwind is the sharp rise in food and energy prices. Still, the way inflation will move is unclear, given the degree of slack in the overall economy, and especially in the labor market.”
Trend As noted by The Conference Board, the general trend is upwards. This is the 6th consecutive monthly increase and 20th in the last 23 months (since March 2009 Great Recession cyclical bottom). The February LEI of 113.4 (preliminary) is:
=> Above the ascending 12-month moving average of 110.6 and has been for months.
=> Above the ascending 24-month moving average of 106.9 and has been for months.
=> The 12-month and 24-month moving averages charts are not shown on this page.

Cycle History The current LEI in February of 113.4 (preliminary) is a Post-Great Recession cyclical high. The Great Recession cyclical low was in March 2009.

Monthly Leading Economic Index (Chart) Below is a chart of the latest 24 months of The Conference Board LEI from the March 2009 Great Recession cyclical low of 97.9 through the latest month reported, February 2011. February 2011 is a Post-Great Recession cyclical high at 113.4.

Commentary The February 2011 LEI (preliminary) posted yet another gain to set yet another Post-Great Recession cyclical high of 113.4 (preliminary), which is very encouraging for the USA economy. The LEI has come a long way from the March 2009 cyclical low. (See chart above)

About The Conference Board Leading Economic Index® (LEI) for the U.S.

The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The leading, coincident, and lagging economic indexes are essentially composite averages of several individual leading, coincident, or lagging indicators. They are constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component – primarily because they smooth out some of the volatility of individual components.

The ten components of The Conference Board Leading Economic Index® for the U.S. include:
Average weekly hours, manufacturing
Average weekly initial claims for unemployment insurance
Manufacturers’ new orders, consumer goods and materials
Index of supplier deliveries – vendor performance
Manufacturers' new orders, nondefense capital goods
Building permits, new private housing units
Stock prices, 500 common stocks
Money supply, M2
Interest rate spread, 10-year Treasury bonds less federal funds
Index of consumer expectations

About The Conference Board

The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.

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