Index signals slowing recovery
A monthly index forecasting economic performance in the United States has edged down, signaling slowing in an already slow recovery.
The Conference Board reported that its Leading Economic Index (LEI) slipped two-tenths of a percent in November to 95.8.
Separate measures of current and past performance increased, however.
“The indicators reflect an economy that remains weak in the face of strong domestic and international headwinds,” said Ken Goldstein, an economist with the Conference Board, a business research and membership group. “Growth will likely be slow through the early months of 2013.”
Despite gains in September and October, overall growth in the LEI has been flat over the past six months even as weakness among the leading indicators has become more pronounced.
For November, the 10 indicators of the LEI were evenly split between increasing and decreasing components. Building permits, the interest rate spread, a leading credit index, manufacturing hours and new orders for consumer goods and materials advanced. Consumer expectations for business conditions, new orders for capital goods, a new orders index and stock prices retreated. An increase in average weekly initial claims for unemployment insurance also pulled down the index.
The Coincident Economic Index (CEI), a measure of current economic performance, edged up two-tenths of a percent in November to 104.9. The CEI has gained four-tenths of a percent over the past six months.
For November, all four of the indicators of the CEI advanced: industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index (LAG), a measure of past performance, increased four-tenths of a percent to 117.8, extending to seven-tenths of a percent the gain over the past three months.
For November, five of seven indicators of the LAG advanced: commercial and industrial financing, consumer financing, the cost of services and inventories. A decrease in the duration of unemployment also bolstered the index. Labor costs pulled down the index, while the average prime rate charged by banks held steady.