change in the index has picked up to 3.3 percent (a 6.7 percent annual rate) in the period through December 2010, from 2.4 percent (about a 5.0 percent annual rate) for the previous six months. In addition, the strengths among the leading indicators have been widespread in recent months.
• The Conference Board CEI for the U.S., a measure of current economic activity, continued to increase in December, with all its components advancing. The six-month change in the index
stands at 0.7 percent (a 1.4 percent annual rate) in the period through December 2010, down from 1.4 percent (a 2.8 percent annual rate) for the previous six months. In December, the CEI increased less than the lagging economic index, and the coincident-to-lagging ratio fell
slightly, as a result. Meanwhile, real GDP grew at a 2.6 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, and its six-month growth rate has continued to accelerate. In addition, the strengths among its components have grown more widespread in recent months. Meanwhile, The Conference Board CEI for the U.S.
remains on a generally increasing path. All in all, the current behavior of the composite indexes and their components suggest that the economic expansion that began in mid-2009 will continue, and could even pick up slightly in the near term.
LEADING INDICATORS
Six of the ten indicators that make up The Conference Board LEI for the U.S. increased in December. The positive contributors – beginning with the largest positive contributor – were building permits, the interest rate spread, average weekly initial claims for unemployment insurance (inverted), stock prices, the index of consumer expectations, and manufacturers’ new orders for nondefense capital goods. The negative contributors – beginning with the larger negative contributor – were index of supplier deliveries (vendor performance) and manufacturers’ new orders for consumer goods and materials. Average weekly manufacturing hours and real money supply held steady in December.
The Conference Board LEI for the U.S. now stands at 112.4 (2004=100). Based on revised data, this index increased 1.1 percent in November and increased 0.4 percent in October. During the six-month span through December, the leading economic index increased 3.3 percent, with eight out of ten components advancing (diffusion index, six-month span equals 80 percent).
COINCIDENT INDICATORS
All four indicators that make up The Conference Board CEI for the U.S. increased in December. The positive contributors to the index – beginning with the largest positive contributor – were industrial production, employees on nonagricultural payrolls, personal income less transfer payments and manufacturing and trade sales.
The Conference Board CEI for the U.S. now stands at 101.9 (2004=100). This index increased 0.1 percent in November and increased 0.2 percent in October. During the six-month period through December, the coincident economic index increased 0.7 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 108.4 (2004=100) in December, with two of the seven components advancing. The positive contributors to the index – beginning with the larger positive contributor – were commercial and industrial loans outstanding and change in CPI for services. The negative contributors –
beginning with the largest negative contributor – were average duration of unemployment (inverted), change in labor cost per unit of output, and the 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 December. Based on revised data, the lagging economic index decreased 0.1 percent in November and remained unchanged in October.
