The Conference Board CEI for the U.S. also increased in November. Employment largely held steady this month, making this the first month since December 2007 that it did not make a negative contribution to the index. Between May and November 2009, the index remained unchanged, an improvement from the decline of 3.8 percent (a -7.5 percent annual rate) from November 2008 to May 2009. In November, the lagging economic index continued to decrease, and with the coincident economic index rising slightly, the coincident–to-lagging ratio increased further. Meanwhile, real GDP expanded at a 2.8 percent annual rate in the third quarter, its first increase since the second quarter of last year.
After having fallen steadily since mid-2007, The Conference Board LEI for the U.S. has risen for eight months, and it is now slightly higher than its latest peak in July 2007. However, its six-month growth rate has slowed somewhat in recent months. Meanwhile, The Conference Board CEI for the U.S. has been flat since the second quarter of the year, after generally declining beginning in December 2007. 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
Six of the ten indicators that make up The Conference Board LEI for the U.S. increased in November. The positive contributors - beginning with the largest positive contributor - were the interest rate spread, average weekly initial claims for unemployment insurance (inverted), average weekly manufacturing hours, building permits, stock prices and real money supply. The negative contributors - beginning with the largest negative contributor – were the index of supplier deliveries (vendor performance), the index of consumer expectations, and manufacturers’ new orders for nondefense capital goods. The manufacturers’ new orders for consumer goods and materials held steady in November.
The Conference Board LEI for the U.S. now stands at 104.9 (2004=100). Based on revised data, this index increased 0.3 percent in October and increased 1.2 percent in September. During the six-month span through November, the leading economic index increased 4.7 percent, with eight out of ten components advancing (diffusion index, six-month span equals 80 percent).
COINCIDENT INDICATORS
Three of the four indicators that make up The Conference Board CEI for the U.S. increased in November. 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. Employment held steady in November.
The Conference Board CEI for the U.S. now stands at 100.1 (2004=100). This index remained unchanged in October and decreased 0.1 percent in September. During the six-month period through November, the coincident economic index remained unchanged, with two out of four components advancing (diffusion index, six-month span equals 50.0 percent).
LAGGING INDICATORS
The Conference Board LAG for the U.S. stands at 108.7 (2004=100) in November, with two of the seven components advancing. The positive
contributors to the index - beginning with the larger positive contributor - were change in labor cost per unit of output, and change in CPI for services. The negative contributors – beginning with the largest negative contributor – were commercial and industrial loans outstanding, average duration of unemployment (inverted), and ratio of consumer installment credit to personal income. The ratio of manufacturing and trade inventories to sales and average prime rate charged by banks held steady in November. Based on revised data, the lagging economic index decreased 0.2 percent in October and decreased 0.5 percent in September.
