Tuesday, October 23, 2012

USA Leading Economic Index Increases: "Fluctuating around a slow growth trend"


The Conference Board: USA Monthly Leading Index

The September 2012 USA Monthly Leading Economic Index rebounded +0.6 to 95.9 (preliminary), which is a post-recession high. Overall, slow economic growth is forecast but downside risk exists via the global economy becoming a drag.

USA Monthly Leading Economic Index The 12-month moving average is 95.2 as of September 2012.



Ataman Ozyildirim, economist at The Conference Board, said "The U.S. LEI increased in September, more than offsetting the decline in August. The LEI has been signaling an economy that is fluctuating around a slow growth trend. The six-month growth rate has slowed substantially, but still remains in growth territory due to positive contributions from the housing and financial components. Meanwhile, the coincident economic index also increased in September."

USA Monthly Composite Indexes The September 2012 readings are chart highs for all 3 indicators: Lagging, Coincident, and Leading. The Indexes have been revamped with benchmark revisions (2004 = 100.00).



Ken Goldstein, economist at The Conference Board, said "The single biggest challenge remains weak demand, domestically and globally. The struggle to regain firmer ground – in financial markets, international trade and global industrial output – continues because of weak consumer demand and a lack of more robust business investment."

USA LEI Components: Six of the ten indicators that make up The Conference Board LEI for the U.S. increased in September. The positive contributors – beginning with the largest positive contributor – were building permits, the interest rate spread, stock prices, the Leading Credit Index (inverted), manufacturers’ new orders for consumer goods and materials and manufacturers’ new orders for nondefense capital goods excluding aircraft. The negative contributors – beginning with the largest negative contributor – were the ISM new orders index, average consumer expectations for business conditions, and average weekly initial claims for unemployment insurance (inverted). Average weekly manufacturing hours held steady in September.

$DIA $SPY $QQQ $IWM $MACRO

Seeking Alpha