Conference Board's Leading Economic Index Increases For Fifth Straight Month

Sponsored Links

Monday morning, the Conference Board released a report showing that its leading economic indicators index increased for the fifth consecutive month in August, although the pace of growth for the month was slightly slower than economists had been anticipating.

The Conference Board said its leading economic index rose 0.6 percent in August following an upwardly revised 0.9 percent increase in July. Economists had expected the index to increase by 0.7 percent compared to the 0.6 percent increase originally reported for the previous month.

Ataman Ozyildirim, economist at the Conference Board said, "Since reaching a peak in July 2007, the LEI fell for twenty months - the longest downtrend since the mid 1970s - but it has been rising since April and its gains have become very widespread."

The continued increase by the leading index reflected positive contributions from vendor performance, the interest rate spread, stock prices, building permits, and consumer expectations.

At the same time, the magnitude of the increase was limited by negative contributions from real money supply, average weekly jobless claims, and manufacturers' new orders for non-defense capital goods.

Average weekly manufacturing hours and manufacturers' new orders for consumer goods and materials held steady in August, the Conference Board noted.

The report also showed that the coincident index was unchanged in August following a revised 0.1 percent increase in July.

Positive contributions from industrial production, personal income less transfer payments and manufacturing and trade sales were offset by a negative contribution from employees on non-agricultural payrolls.

Ken Goldstein, economist at the Conference Board said, "The LEI has risen for five consecutive months and the coincident economic index has stopped falling. Taken together, this suggests that the recession is bottoming out."

"These numbers are consistent with the view that after a very severe downturn, a recovery is very near," Goldstein added. "But, the intensity and pattern of that recovery is more uncertain."

Meanwhile, the Conference Board also said that the lagging index edged down 0.1 percent in August after falling by 0.5 percent in the previous month.

The continued decrease by the lagging index reflected negative contributions from commercial and industrial loans outstanding, the ratio of consumer installment credit to personal income, and the ratio of manufacturing and trade inventories to sales.

Monday morning, the Conference Board released a report showing that its leading economic indicators index increased for the fifth consecutive month in August, although the pace of growth for the month was slightly slower than economists had been anticipating. The Conference Board said its leading economic index rose 0.6 percent in August following an upwardly revised 0.9 percent increase in July. Economists had expected the index to increase by 0.7 percent. (Market News Provided by RTTNews)