Conference Board Economic Index climbs

Last updated on July 2nd, 2019 at 09:07 am

The Conference Board Leading Economic Index (LEI) for the U.S. economy increased 0.7 percent in May to 123.1, following a 0.7 percent increase in April, and a 0.4 percent increase in March.

“The U.S. LEI increased sharply again in May, confirming the outlook for more economic expansion in the second half of the year after what looks to be a much weaker first half,” said Ataman Ozyildirim, director, Business Cycles and Growth Research, at The Conference Board. “While residential construction and consumer expectations support the more positive outlook, industrial production and new orders in manufacturing are painting a somewhat more mixed picture.”

The Conference Board Coincident Economic Index (CEI) for the United States increased 0.1 percent in May to 112.1 (2010 = 100), following a 0.2 percent increase in April, and no change in March. The Conference Board Lagging Economic Index (LAG) for the U.S. increased 0.2 percent in May to 117.0 (2010 = 100), following a 0.2 percent increase in April, and a 0.5 percent increase in March.

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 10 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.
ISM Index of New Orders.
Manufacturers’ new orders, nondefense capital goods excluding aircraft orders.
Building permits, new private housing units.
Stock prices, 500 common stocks.
Leading Credit Index.
Interest rate spread, 10-year Treasury bonds less federal funds.
Average consumer expectations for business conditions.

The Conference Board reported improved results for nine of the indicators. Only the average weekly hours in manufacturing held steady. None of the indicators weakened.

The Conference Board is a global, nonprofit, independent business membership and research association working in the public interest.

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