Wednesday, September 26, 2012

USA LEI Decreases: "Pace of economic growth unlikely to change much in coming months"

The Conference Board: USA Monthly Leading Index

The August 2012 USA Monthly Leading Economic Index dipped -0.1 to 95.7 (preliminary), which is just below the post-recession highs of 95.8 for May 2012 and July 2012. Overall, continuing, slow economic growth is forecast but downside risk exists via the global economy becoming a drag. The LEI is being boosted by the rising stock market.

USA Monthly Leading Economic Index The 12-month moving average is 95.0 as of August 2012.

Ataman Ozyildirim, economist at The Conference Board, said "The U.S. LEI has declined in three of the last six months. While its six-month growth rate has slowed substantially, it still remains in growth territory due to positive contributions from the financial components including stock prices, yield spread and the Leading Credit Index. Over the last several months, the U.S. LEI seems to be fluctuating around a flat trend, while strengths and weaknesses among its components remain balanced. Meanwhile, the coincident economic index, a measure of current economic activity, edged up in August. The strengths among the coincident indicators have become less widespread, with three out of four components advancing over the past six months."

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

Ken Goldstein, economist at The Conference Board, said "The economy continues to be buffeted by strong headwinds domestically and internationally. As a result, the pace of growth is unlikely to change much in the coming months. Weak domestic demand continues to be a major drag on the economy."


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