• The Conference Board CEI for the U.S. also continued to increase in January, and it has advanced in four of the last seven months. Industrial production continued to gain, more than offsetting the small decrease in employment. Between July 2009 and January 2010, the CEI rose 0.6 percent (a 1.2 percent annual rate), a reversal from the decline of 2.4 percent (a -4.7 percent annual rate) during the previous six months. In January, 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 5.7 percent annual rate in the fourth quarter of 2009, following an increase of 2.2 percent annual rate in the third quarter.
• The Conference Board LEI for the U.S. has risen steadily for the past ten months, and it has reached its highest level. However, its six-month growth rate has moderated somewhat in recent months. Meanwhile, The Conference Board CEI for the U.S. has risen slightly since July 2009, after a steep decline from December 2007 to June 2009. Taken together, the current behavior of the composite indexes suggests that economic conditions should continue to improve in the near term.
LEADING INDICATORS
Five of the ten indicators that make up The Conference Board LEI for the U.S. increased in January. The positive contributors – beginning with the largest positive contributor – were the interest rate spread, the index of supplier deliveries (vendor performance), average weekly manufacturing hours, stock prices and the index of consumer expectations. The negative contributors – beginning with the largest negative contributor – were real money supply, average weekly initial claims for unemployment insurance (inverted), building permits, and
manufacturers’ new orders for nondefense capital goods. Manufacturers’ new orders for consumer goods and materials held steady in January.
The Conference Board LEI for the U.S. now stands at 107.4 (2004=100). Based on revised data, this index increased 1.2 percent in December and increased 1.1 percent in November. During the six-month span through January, the leading economic index increased 4.8 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 January. 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 100.1 (2004=100). This index remained unchanged in December and increased 0.3 percent in November. During the six-month period through January, the coincident economic index increased 0.6 percent, with three out of four components advancing (diffusion index, six-month span equals 75.0 percent).
LAGGING INDICATORS
The Conference Board LAG for the U.S. stands at 108.0 (2004=100) in January, with two of the seven components advancing. The positive contributors to the index – beginning with the largest 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), 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 January. Based on revised data, the lagging economic index decreased 0.3 percent in December and decreased 0.7 percent in November.
