Leading economic index forecasts slow growth, but little momentum
A monthly measure of future economic activity in the United States continues to forecast growth, but at its slowest pace in more than a year.
The Conference Board reported that its Leading Economic Indicator (LEI) rose three-tenths of percent in September. A separate measure of past performance also increased, while a measure of current activity remained unchanged.
“The LEI remains on a general upward trend, but it is growing at its slowest pace since the middle of 2009,” said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership group. “There isn’t any indication of a relapse into another downturn through the end of the year.”
Ken Goldstein, another economist with the Conference Board, said the LEI suggests little change in economic conditions through the holidays and early months of 2011. “More than a year after the recession officially ended, the economy is slow and has no forward momentum.”
The LEI now stands at 110.4. Based on revised information, the index edged up a total of three-tenths of a percent in July and August.
Over the past six months, the index has advanced eight-tenths of a percent.
For September, five of the 10 indicators upon which the LEI is based advanced, including the interest rate spread, real money supply, stock prices and new orders for consumer goods and materials. Moreover, average weekly initial claims for unemployment insurance were down. Three indicators retreated: vendor performance, building permits and consumer expectations. Average weekly manufacturing hours and new orders for nondefense capital goods held steady.
The Conference Board Lagging Economic Index (LAG), a measure of past economic performance, increased four-tenths of a percent to 108.4 in September with three of seven components advancing. Based on revised information, the LAG increased a combined half of a percentage point in July and August.
The Conference Board Coincident Economic Index (CEI) held steady in September at 101.4. The CEI has edged up a tenth in the past three months and nine-tenths in the past six months. For September, personal income less transfer payments and manufacturing and trade sales increased. But nonfarm payrolls and industrial production decreased.