The Conference Board CEI for the U.S. was unchanged in September, following small increases in the previous two months. Employment has continued to fall, while industrial production has risen for three straight months. Between March and September 2009, the index decreased 1.1 percent (a -2.2 percent annual rate), slower than the decline of 3.4 percent (a - 6.8 percent annual rate) for the previous six months. In September, the lagging economic index for the U.S. continued to decrease, and with the coincident economic index remaining unchanged, the coincident-to-lagging ratio increased again. Meanwhile, real GDP fell at a 0.7 percent annual rate in the second quarter, following a contraction of 6.4 percent annual rate for the first quarter of the year.
After having fallen steadily since reaching a peak in July 2007, The Conference Board LEI for the U.S. has increased sharply over the past half year, and its six-month growth rate has picked up to the highest rate since 1983. Meanwhile, the downtrend in The Conference Board CEI for the U.S. has halted in recent months, with the index rising slightly in the third quarter. All in all, the behavior of the composite indexes suggests that the recession is bottoming out and that economic conditions will continue to improve in the near term.
LEADING INDICATORS
Eight 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 interest rate spread, index of consumer expectations, average weekly initial claims for unemployment insurance (inverted), stock prices, real money supply, index of supplier deliveries (vendor performance), manufacturers’ new orders for nondefense capital goods and manufacturers’ new orders for consumer goods and materials. The negative contributors – beginning with the largest negative contributor – were average weekly manufacturing hours and building permits.
The Conference Board LEI for the U.S. now stands at 103.5 (2004=100). Based on revised data, this index increased 0.4 percent in August and increased 1.0 percent in July. During the six-month span through September, the leading economic index increased 5.7 percent, with nine out of ten components advancing (diffusion index, six-month span equals 90 percent).
COINCIDENT INDICATORS
Three of the four indicators that make up The Conference Board CEI for the U.S. increased in September. The positive contributors to the index – beginning with the largest positive contributor – were industrial production, personal income less transfer payments and manufacturing and trade sales. The negative contributor was employees on nonagricultural payrolls.
The Conference Board CEI for the U.S. now stands at 99.9 (2004=100). This index increased 0.1 percent in August and increased 0.1 percent in July. During the six-month period through September, the coincident economic index decreased 1.1 percent, with one out of four components advancing (diffusion index, six-month span equals 25 percent).
LAGGING INDICATORS
The Conference Board LAG for the U.S. stands at 109.6 (2004=100) in September, with two of the seven components advancing. The positive contributors to the index – beginning with the largest positive contributor – were change in CPI for services, and change in labor cost per unit of output. The negative contributors – beginning with the largest negative contributor – were commercial and industrial loans outstanding, average duration of unemployment (inverted), ratio of consumer installment credit to personal income and ratio of manufacturing and trade inventories to sales. The average prime rate charged by banks held steady in September. Based on revised data, the lagging economic index decreased 0.2 percent in August and decreased 0.6 percent in July.
