The Conference Board CEI for the U.S., a measure of current economic activity, continued to increase as well in August. Between February and August 2011, the coincident economic index increased 0.8 percent (about a 1.6 percent annual rate), slower than the growth of 1.2 percent (about a 2.4 percent annual rate) between August 2010 and February 2011. However, the strengths among the coincident indicators have been very widespread, with all components increasing over the past six months. Meanwhile, real GDP increased at a 1.0 percent annual rate in the second quarter of 2011, after growing 0.4 percent annual rate in the first quarter.
The Conference Board LEI for the U.S. continued to increase in August, though much of this gain is attributable to the yield spread and real money supply; indicators of the real economy, as well as expectations, continue to remain weak. Meanwhile, The Conference Board CEI for the U.S. continued to increase modestly in August, amid widespread strengths among its components. However, its six-month growth rate has remained within a narrow range since mid-2010. While risks to the current economic expansion are increasing, the recent behavior of the composite indexes and their components suggests that economic activity should continue to expand in the near-term, albeit at a modest pace.
LEADING INDICATORS
Four of the ten indicators that make up The Conference Board LEI for the U.S. increased in August. The positive contributors – beginning with the largest positive contributor – were real money supply, the interest rate spread, building permits and the index of supplier deliveries (vendor performance). The negative contributors – beginning with the largest negative contributor – were stock prices, the index of consumer expectations, average weekly manufacturing hours, average weekly initial claims for unemployment insurance (inverted), manufacturers’ new orders for consumer goods and materials, and manufacturers’ new orders for nondefense capital goods.
The Conference Board LEI for the U.S. now stands at 116.2 (2004=100). Based on revised data, this index increased 0.6 percent in July and increased 0.3 percent in June. During the six-month span through August, the leading economic index increased 2.4 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 August. The positive contributors to the index – beginning with the largest positive contributor – were personal income less transfer payments, industrial production, and manufacturing and trade sales. Employment held steady in August.
The Conference Board CEI for the U.S. now stands at 103.3 (2004=100). This index increased 0.1 percent in July and increased 0.2 percent in June. During the six-month period through August, the coincident economic index increased 0.8 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 110.3 (2004=100) in August, 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, average duration of unemployment (inverted) and the ratio of consumer installment credit to personal income. The negative contributors – beginning with the largest negative contributor – were change in labor cost per unit of output and change in CPI for services. The ratio of manufacturing and trade inventories to sales and the average prime rate charged by banks held steady in August. Based on revised data, the lagging economic index increased 0.3 percent in July and increased 0.3 percent in June.
