The Conference Board CEI for the U.S., a measure of current economic activity, continued to increase in April. The index rose 1.3 percent (a 2.6 percent annual rate) in the six months through April 2011, faster than the growth of 0.7 percent (a 1.4 percent annual rate) for the previous six months. In addition, the strengths among the coincident indicators have remained very widespread, with all components advancing over the past six months. The lagging economic index continued to increase faster than the CEI, and the coincident-to-lagging ratio fell again, as a result. Meanwhile, real GDP expanded at a 1.7 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 for the U.S. decreased in April for the first time since the middle of last year. As a result, its six-month growth rate fell modestly this month, after strengthening since the fourth quarter of 2010. Meanwhile, The Conference Board CEI for the U.S. has continued to increase, and its six-month growth rate has been fairly stable. Taken together, the current behavior of the composite indexes and their components suggest that economic activity is likely to expand at a moderate pace in the near term.
LEADING INDICATORS
Four of the ten indicators that make up The Conference Board LEI for the U.S. increased in April. The positive contributors – beginning with the largest positive contributor – were the interest rate spread, the index of consumer expectations, stock prices, and real money supply. The negative contributors – beginning with the largest negative contributor – were average weekly initial claims for unemployment insurance (inverted), the index of supplier deliveries (vendor performance), building permits, average weekly manufacturing hours, manufacturers’ new orders for nondefense capital goods and, manufacturers’ new orders for consumer goods and materials.
The Conference Board LEI for the U.S. now stands at 114.0 (2004=100). Based on revised data, this index increased 0.7 percent in March and increased 0.9 percent in February. During the sixmonth span through April, the leading economic index increased 3.5 percent, with seven out of ten components advancing (diffusion index, six-month span equals 70 percent).
COINCIDENT INDICATORS
Three of the four indicators that make up The Conference Board CEI for the U.S. increased in April. The positive contributors to the index – beginning with the largest positive contributor – were employees on nonagricultural payrolls, personal income less transfer payments, and manufacturing and trade sales. Industrial production held steady in April.
The Conference Board CEI for the U.S. now stands at 102.8 (2004=100). This index increased 0.2 percent in March and decreased 0.1 percent in February. During the six-month period through
April, the coincident economic index increased 1.3 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 108.8 (2004=100) in April, with four of the seven components advancing. The positive contributors to the index – beginning with the largest positive contributor – were commercial and industrial loans outstanding, average duration of unemployment (inverted), the change in labor cost per unit of output and the change in CPI for services. The negative contributor to the index was the ratio of consumer installment credit to personal income. The ratio of manufacturing and trade inventories to sales and the average prime rate charged by banks held steady in April. Based on revised data, the lagging economic index increased 0.3 percent in March and increased 0.3 percent in February.
