Saturday, August 25, 2012

USA LEI Increases: "Slow growth through the end of 2012"

The Conference Board: USA Monthly Leading Index

The July 2012 USA Monthly Leading Economic Index rose slightly +0.4 to 95.8 (preliminary), which offset the prior month -0.4 decrease. Overall, continuing, slow economic growth is forecast but downside risk exists via the global economy becoming a drag.

USA Monthly LEI The July 2012 reading rebounded to the May 2012 reading, which was a post-recession high and the highest since 2008. The 12-month average is 94.8.

Ataman Ozyildirim, economist at The Conference Board, said "With this month’s increase, the U.S. LEI returned to its May level. The majority of its components improved, led by large contributions from housing permits and initial unemployment claims. The LEI’s six-month growth rate seems to be stabilizing, pointing to a continuing but slow expansion in economic activity for the rest of the year. Meanwhile, the coincident economic index, a measure of current conditions, has been rising slowly but steadily, with all four components improving over the last six months."

USA Monthly Composite Indexes The July 2012 readings are chart highs for the Lagging, Coincident, and Leading indicators. The Indexes have been revamped with benchmark revisions (2004 = 100.00).

Ken Goldstein, economist at The Conference Board, said "The indicators point to slow growth through the end of 2012. Lack of domestic demand remains a big issue. However, back-to-school sales are better than expected, suggesting that the consumer is starting to come back. Retail sales this time of year are often an indicator of how the holiday season will turn out."


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