Thursday, April 21, 2011

USA Monthly Leading Economic Index at Post-Recession High! (Chart) "Strengthening business conditions"

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The Conference Board: USA Monthly Leading Index


Official Statement by The Conference Board NEW YORK, April 21, 2011 - The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.4 percent in March to 114.1 (2004 = 100), following a 1.0 percent increase in February, and a 0.2 percent increase in January. Says Ataman Ozyildirim, economist at The Conference Board: “The U.S. LEI continued to increase in March, pointing to strengthening business conditions in the near term. The March increase was led by the interest rate spread and housing permits components, while consumer expectations dropped. The U.S. CEI, a monthly measure of current economic conditions, also continued to rise, led by gains in industrial production and employment.” Says Ken Goldstein, economist at The Conference Board: “The U.S. LEI continues to point to sustained economic growth through year end. Global disruptions, including unrest in the Middle East, rising oil prices and the Japan earthquake, may have some repercussions. However, it remains to be seen what the impact of these shocks will be on the United States and the broader global economy.”

Trend The general trend is upwards. This is the 7th consecutive monthly increase and 21st in the last 24 months (since the March 2009 Great Recession cyclical bottom).

Cycle History The current LEI in March of 114.1 (preliminary) is a Post-Great Recession cyclical high. The Great Recession cyclical low was 97.9 in March 2009.

Monthly Leading Economic Index (Chart) Below is a chart of the The Conference Board LEI from the March 2009 Great Recession cyclical low of 97.9 through the latest month reported.


Commentary The March 2011 LEI (preliminary) posted yet another gain to set yet another Post-Great Recession cyclical high of 114.1 (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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