A monthly index forecasting economic conditions in the United States has increased, signaling growth in the months ahead.
The Conference Board reported that its Leading Economic Index (LEI) advanced six-tenths of a percent to 127.8 in June. Separate measures of current and past economic performance both rose two-tenths of a percent.
“The U.S. LEI rose sharply in June, pointing to continued growth in the U.S. economy and perhaps even a moderate improvement in GDP growth in the second half of the year,” said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership association.
“The broad-based gain in the U.S. LEI was led by a large contribution from housing permits, which improved after several month of weakness,” Ozyildirim said.
The Leading Economic Index increased 2.5 percent during the first half of 2017, faster than the 1.5 percent gain during the second half of 2016. Strengths among leading indicators have remained widespread.
Gross domestic product, the broad measure of goods and services produced in the country, grew at an annual rate of 1.4 percent in the first quarter of 2017 after a 2.1 percent gain in the fourth quarter of 2016.
For June, eight of 10 components of the Leading Economic Index advanced, including building permits, consumer expectations for business conditions, interest rate spread, a leading credit index, new orders for both consumer and capital goods, a new orders index and stock prices. An increase in average weekly initial claims for unemployment benefits pulled down the index. Average weekly manufacturing hours held steady.
The Coincident Economic Index, a measure of current conditions, rose two-tenths of a percent to 115.5. The index has increased nine-tenths of a percent over the past six months.
For June, all four components of the index advanced: industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index, a measure of past performance, rose two-tenths of a percent to 124.4. The index has increased
six-tenths of a percent over the past three months.
For June, four of seven components of the index advanced: the average prime rate charged by banks, consumer credit, inventories and labor costs. Commercial and industrial financing retreated, as did the cost of services. The average duration of unemployment remained unchanged.