• The Conference Board CEI for the U.S., a measure of current economic activity, also increased in October. Employment contributed positively to the index for the first time since this May. The six-month change in the coincident economic index has slowed to 0.6 percent (a 1.2 percent annual rate) in the period through October 2010, down from 1.4 percent (a 2.8 percent annual rate for the previous six months. In October, the lagging economic index increased at the same rate as the CEI, and the coincident-to-lagging ratio remained unchanged, as a result. Meanwhile, real GDP grew at a 2.0 percent annual rate in the third quarter of 2010, following an increase of 1.7 percent annual rate in the second quarter.
• The Conference Board LEI for the U.S. remains on an upward trend, although the strengths and weaknesses among its components have only been roughly balanced in recent months. However, its six-month growth rate, which had been falling rapidly this year, has picked up somewhat lately. Meanwhile, The Conference Board CEI for the U.S. has increased very slightly since the spring, after having risen moderately for almost a year. Taken together, the current behavior of the composite indexes and their components suggest that economic activity will continue to expand, but at a slow pace in the near term.
LEADING INDICATORS
Six of the ten indicators that make up The Conference Board LEI for the U.S. increased in October. The positive contributors – beginning with the largest positive contributor – were interest rate spread, stock prices, real money supply, average weekly manufacturing hours, index of consumer expectations, and building permits. The negative contributors – beginning with the larger negative contributor – were index of supplier deliveries (vendor performance) and manufacturers’ new orders for nondefense capital goods. The average weekly initial claims for unemployment insurance (inverted) and manufacturers’ new orders for consumer goods and materials* held steady in October.
The Conference Board LEI for the U.S. now stands at 111.3 (2004=100). Based on revised data, this index increased 0.5 percent in September and increased 0.1 percent in August. During the sixmonth span through October, the leading economic index increased 1.6 percent, with five out of ten components advancing (diffusion index, six-month span equals 55 percent).
COINCIDENT INDICATORS
Three of the four indicators that make up The Conference Board CEI for the U.S. increased in October. 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 October.
The Conference Board CEI for the U.S. now stands at 101.5 (2004=100). This index remained unchanged in September and remained unchanged in August. During the six-month period through
October, the coincident economic index increased 0.6 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 108.7 (2004=100) in October, 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 ratio of consumer installment credit to personal income. The negative contributors – beginning with the largest negative contributor – were commercial and industrial loans outstanding, average duration of unemployment (inverted), and change in CPI for services. The ratio of manufacturing and trade inventories to sales, and average prime rate charged by banks held steady in October. Based on revised data, the lagging economic index increased 0.5 percent in September and increased 0.1 percent in August.
