Leading index climbs to its highest level in more than a decade
An index forecasting economic performance in the United States has climbed to its highest level in more than a decade.
The Conference Board reported that its Leading Economic Index rose six-tenths of a percent to 126.2 in February. With gains in each of the last six months, the index has advanced 2.3 percent over that span. Separate measures of current and past economic performance also increased in February.
“Widespread gains across a majority of the leading indicators point to an improving economic outlook for 2017, although gross domestic product growth is likely to remain moderate,” said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership association.
Gross domestic product, the broad measure of goods and services produced in the country, grew at an annual rate of 1.9 percent in the fourth quarter of 2016 after increasing 3.5 percent in the third quarter.
For February, nine of 10 components of the Leading Economic Index advanced, including average weekly manufacturing hours, consumer expectations for business conditions, interest rate spread, leading credit and new orders indexes, new orders for consumer and capital goods and stock prices. A decrease in average weekly initial claims for unemployment insurance also bolstered the index. Building permits declined.
The Coincident Economic Index, a measure of current conditions, increased three-tenths of a percent to 114.9. The index has advanced 1.1 percent over the past six months.
For February, all four of the components of the index posted gains: industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index, a measure of past performance, rose two-tenths of a percent to 123.5. The index has increased seven-tenths of a percent over the past three months.
For February, three components of the index declined, three remained unchanged and one increased. Commercial and industrial financing, inventories and labor costs decreased. The average duration of unemployment, average prime rate charged by banks and the cost of services held steady. Consumer credit increased.