The Conference Board CEI for the U.S., a measure of current economic activity, was unchanged again in September. Employment and industrial production made small negative contributions to the index, offsetting the small increases in the other components. The six-month change in the coincident economic index has slowed to 0.9 percent (a 1.8 percent annual rate) in the period through September 2010, down from 1.4 percent (a 2.8 percent annual rate) in the six-month period ending in May 2010. In September, the lagging economic index continued to increase, and with the CEI remaining unchanged, the coincident-to-lagging ratio decreased further. Meanwhile, real GDP grew at 1.7 percent annual rate in the second quarter of 2010, following an increase of 3.7 percent annual rate in the first quarter.
The Conference Board LEI for the U.S. remains on a general upward trend, although its growth has fallen very sharply in recent months. Its six-month growth rate is at its slowest pace since the middle of 2009, with the weaknesses among its components becoming more widespread lately. Meanwhile, The Conference Board CEI for the U.S. has been basically flat since May this year, after having risen moderately from its most recent trough in June 2009. Taken together, the current behavior of the composite indexes and their components still suggests that economic activity will continue to expand, but at a slow pace in the near term.
LEADING INDICATORS
Five 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 the interest rate spread, average weekly initial claims for unemployment insurance (inverted), real money supply, stock prices, and manufacturers’ new orders for consumer goods and materials. The negative contributors – beginning with the largest negative contributor – were index of supplier deliveries (vendor performance), building permits, and index of consumer expectations. Average weekly manufacturing hours and manufacturers’ new orders for nondefense capital goods held steady in September.
The Conference Board LEI for the U.S. now stands at 110.4 (2004=100). Based on revised data, this index increased 0.1 percent in August and increased 0.2 percent in July. During the six-month span through September, the leading economic index increased 0.8 percent, with four out of ten components advancing (diffusion index, six-month span equals 40 percent).
COINCIDENT INDICATORS
Two 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 larger positive contributor – were personal income less transfer payments and manufacturing and trade sales. The negative contributors – beginning with the larger negative contributor – were employees on nonagricultural payrolls and industrial production.
The Conference Board CEI for the U.S. now stands at 101.4 (2004=100). This index remained unchanged in August and increased 0.1 percent in July. During the six-month period through September, the coincident economic index increased 0.9 percent, with all four components advancing (diffusion index, six-month span equals100.0 percent).
LAGGING INDICATORS
The Conference Board LAG for the U.S. stands at 108.4 (2004=100) in September, with three of the seven components advancing. The positive contributors to the index – beginning with the largest positive contributor – were commercial and industrial loans outstanding,change in labor cost per unit of output, and average duration of unemployment (inverted). The negative contributors – beginning with the larger negative contributor – were change in CPI for services 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 September. Based on revised data, the lagging economic index increased 0.1 percent in August and increased 0.4 percent in July.
