The coincident index was unchanged again in April, and this measure of current economic activity has not increased since October 2007. Industrial production and employment decreased this month, but these declines were offset by gains in personal income less transfer payments and real manufacturing and trade sales. The six-month change in the coincident index continued to fall, to -0.4 percent (a -0.7 percent annual rate) in April, down from an increase of 0.3 percent (a 0.6 percent annual rate) from July 2007 to January 2008. The lagging index continued to increase this month and as a result, the coincident to lagging ratio decreased further.
After declining steadily since the middle of 2007, the leading index appears to have stabilized lately, increasing slightly in March and April. Meanwhile, the coincident index declined slightly since October 2007 and the weaknesses among its components have been widespread in recent months. During the first quarter, real GDP expanded at a 0.6 percent annual rate, the same growth rate that prevailed in the fourth quarter of 2007. The current behavior of the composite indexes so far still suggests that economic activity is likely to remain weak in the near term.
LEADING INDICATORS
Six of the ten indicators that make up the leading index increased in April. The positive contributors - beginning with the largest positive contributor - were stock prices, interest rate spread, building permits, average weekly initial claims for unemployment insurance (inverted), index of supplier deliveries (vendor performance) and manufacturers' new orders for consumer goods and materials*. The negative contributors - beginning with the largest negative contributor - were index of consumer expectations, average weekly manufacturing hours, and manufacturers' new orders for nondefense capital goods. Real money supply held steady in April.
The leading index now stands at 102.0 (2004=100). Based on revised data, this index increased 0.1 percent in March and decreased 0.3 percent in February. During the six-month span through April, the leading index decreased 1.2 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 coincident index increased in April. 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 were industrial production and employees on nonagricultural payrolls.
The coincident index now stands at 106.9 (2004=100). This index remained unchanged in March and decreased 0.3 percent in February. During the six-month period through April, the coincident index decreased 0.4 percent.
