Index forecasts 2 percent U.S growth in 2020

Ataman Ozyildirim

A monthly index forecasting economic conditions remains unchanged, signaling continued growth in 2020.

The Conference Board reported its Leading Economic Indicator (LEI) held steady at 111.6 in November after three straight months of declines. The index has slipped two-tenths of a percent over the past six months.

Separate measures of current and past conditions both increased.

“While the six-month growth rate of the LEI remains slightly negative, the index suggests that economic growth is likely to stabilize around 2 percent in 2020,” said Ataman Ozyildirim, senior director of economic research at the Conference Board, a business research and membership association.

Strengths in consumer outlooks, financial markets and residential construction offset weakness in labor markets and manufacturing, Ozyildiirm said.

For November, six of 10 indicators of the LEI advanced, including building permits, consumer expectations, interest rate spread, a leading credit index, new orders for consumer goods and stock prices. A new orders index retreated, and an increase in average weekly initial claims for unemployment insurance also pulled down the index. Average weekly manufacturing hours and new orders for capital goods were unchanged.

The Coincident Economic Index, a measure of current performance, rose four-tenth of a percent to 106.8. The index has increased nine-tenths of a percent over the past six months.

For November, all four indicators of the index advanced: income, industrial production, payrolls and sales.

The Lagging Economic Index, a measure of past performance, rose a half of a percent to 108.7. The index has increased eight-tenths of a percent over the past three months.

For November, three of seven components of the index advanced, including the cost of services and personal credit. A decrease in the average duration of unemployment also bolstered the index. The average prime rate charged by banks declined, as did the cost of labor and inventories. Commercial and industrial financing held steady.