The Conference Board CEI for the U.S., a measure of current economic activity, continued to increase in June. The index rose 0.8 percent (a 1.6 percent annual rate) between December 2010 and June 2011, slightly below the growth of 0.9 percent (a 1.8 percent annual rate) for the previous six months. All of the four coincident indicators have advanced over the past six months. The lagging economic index continued to increase faster than the CEI, and as a result the coincident-to-lagging ratio fell slightly again. Meanwhile, real GDP expanded at a 1.9 percent annual rate in the first quarter of the year, slower than the growth of 3.1 percent annual rate in the fourth quarter of 2010.
The Conference Board LEI continued to increase in June. However, its six-month growth rate has been moderating. Meanwhile, The Conference Board CEI has remained on an increasing trend, and its six-month growth rate has been moderating as well. Taken together, the current behavior of the composite indexes and their components suggest that economic activity will continue to expand at a modest pace in the near term.
LEADING INDICATORS.
Five of the ten indicators that make up The Conference Board LEI for the U.S. increased in June. The positive contributors – beginning with the largest positive contributor – were real money supply, the interest rate spread, building permits, the index of supplier deliveries (vendor performance), and manufacturers’ new orders for consumer goods and materials. The negative contributors – beginning with the largest negative contributor – were stock prices, the index of consumer expectations, average weekly manufacturing hours, and manufacturers’ new orders for nondefense capital goods. The average weekly initial claims for unemployment insurance (inverted) held steady in June.
The Conference Board LEI for the U.S. now stands at 115.3 (2004=100). Based on revised data, this index increased 0.8 percent in May and decreased 0.3 percent in April. During the six-month span through June, the leading economic index increased 2.7 percent, with five out of ten components advancing (diffusion index, six-month span equals 50.0 percent).
COINCIDENT INDICATORS.
All four indicators that make up The Conference Board CEI for the U.S. increased in June. The positive contributors to the index – beginning with the largest positive contributor – were personal income less transfer payments, industrial production, manufacturing and trade sales and employees on nonagricultural payrolls.
The Conference Board CEI for the U.S. now stands at 102.9 (2004=100). This index increased 0.1 percent in May and decreased 0.1 percent in April. During the six-month period through June, the coincident economic index increased 0.8 percent, with all four components advancing (diffusion index, six-month span equals 100.0 percent).
LAGGING INDICATORS.
The Conference Board LAG for the U.S. stands at 109.5 (2004=100) in June, with three of the seven components advancing. The positive contributors to the index – beginning with the largest positive contributor – were commercial and industrial loans outstanding, the ratio of manufacturing and trade inventories to sales, and the change in labor cost per unit of output (manufacturing). The negative contributors – beginning with the largest negative contributor – were change in CPI for services, and the average duration of unemployment (inverted). The average prime rate charged by banks, and ratio of consumer installment credit to personal income held steady in June. Based on revised data, the lagging economic index increased 0.2 percent in May and increased 0.6 percent in April.
