A monthly index forecasting economic performance in the United States continues to rise, in turn bolstering the outlook for the second half of the year.
The Conference Board reported that its Leading Economic Index rose six-tenths of a percent to 123.6 in June. Separate measures of current and past economic activity also increased.
“The upward trend in the U.S. LEI seems to be gaining more momentum with another large increase in June, pointing to continued strength in the economic outlook for the remainder of the year,” said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership association.
An increase in residential building permits bolstered the index, Ozyildirim said, while such labor market indicators as the average workweek and initial claims for unemployment insurance remained unchanged.
The index has increased 2.1 percent over the past six months. That’s slower than the 3.2 percent gain over the previous six months, but the strengths of the components of the index have become more widespread.
Gross domestic product, the broad measure of goods and services produced in the country, contracted two-tenths of a percent in the first quarter of 2015 after expanded 2.2 percent during the fourth quarter of 2014.
For June, six of the 10 components of the leading index advanced: building permits, consumer expectations, interest rate spread, a leading credit index, a new orders index and new factory orders for capital goods. Stock prices declined. Average weekly manufacturing hours, average weekly initial claims for unemployment insurance and new factory orders for consumer goods all remained unchanged.
The Coincident Economic Index, a measure of current conditions, rose two-tenths of a percent to 112.5 in June. The index has increased nine-tenths of a percent over the past six months.
For June, all four components of the index increased: industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index, a measure of past performance, rose seven-tenths of a percent to 117.6. The index has climbed
1 percent over the past three months.
For June, four of seven components of the index advanced, including consumer credit, commercial and industrial financing and the cost of services. A decrease in the average duration of unemployment also bolstered the index. Labor costs, inventories and the average prime rate charged by banks held steady.