Sunday, June 19, 2011

USA Monthly Leading Index at Post-Recession High! (Chart) "Expanding economic activity in coming months"

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The Conference Board: USA Monthly Leading Index


Official Statement by The Conference Board NEW YORK, June 17, 2011 - The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.8 percent in May to 114.7 (2004 = 100), following a 0.4 percent decline in April, and a 0.7 percent increase in March. The largest contributions came from the interest rate spread, consumer expectations, and housing permits. Says Ataman Ozyildirim, economist at The Conference Board: “The U.S. LEI rebounded in May and resumed its upward trend with a majority of the components supporting this gain. The Coincident Economic Index, a monthly measure of current economic conditions, continued to increase slowly but steadily. Overall, despite short-term volatility, the composite indexes still point to expanding economic activity in the coming months.” Says Ken Goldstein, economist at The Conference Board: “Modest economic growth is being buffeted by some strong headwinds, including high gas and food prices and a soft housing market. The economy will likely continue to grow through the summer and fall, however it will be choppy.”

Trend The short-term trend has reversed to upwards, after the April decline. The intermediate-term (6 months) and long-term (12 months) trends continue upwards. The May 2011 increase is the 24th increase in the past 26 months (since the March 2009 Great Recession cyclical low of 97.9).

Cycle History The Leading Economic Index for May 2011 is at a Post-Great Recession cyclical high of 114.7, which exceeds the previous high in March 2011 of 114.3. 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 May 2011 Leading Economic Index (preliminary) is very encouraging and a Post-Great Recession cyclical high of 114.7. This indicates modest expansion, but noted as choppy, through Summer 2011. The LEI has come a long way from the March 2009 cyclical low of 97.9. (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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