An index forecasting economic conditions in the United States continues to climb, signaling growth in the months ahead.
The Conference Board reported its Leading Economic Index (LEI) rose nine-tenths of a percent to 116 in July.
Separate measures of current conditions and past performance also increased.
“The leading index’s overall upward trend, which started with the end of the pandemic-induced recession in April 2020, is consistent with strong economic growth in the second half of the year,” said Ataman Ozyildirim, senior director of economic research at the Conference Board.
The COVID-19 pandemic and concerns over rising inflation present economic headwinds, Ozyildirim said. Still, the Conference Board forecasts year-over-year growth in gross domestic product, the broad measure of goods and services produced in the country, of 6 percent in 2021 and 4 percent in 2022.
The Leading Economic Index increased 5.4 percent over the past six months, up from 5 percent over the six months before that. Strength among the leading indicators remained widespread.
For June, all 10 indicators of the index advanced, including average weekly manufacturing hours, building permits, consumer expectations, interest rate spread, leading credit and new order indexes, new orders for consumer and capital goods and stock prices. A decrease in average weekly initial claims for unemployment benefits also bolstered the index.
The Coincident Economic Index rose six-tenths of a percent to 105.6. The index increased 1.8 percent over the past six months.
For July, all four indicators of the index advanced — industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index rose six-tenths of a percent to 106.5. The index increased 1.4 percent over the past three months.
For July, five of seven indicators advanced, including consumer debt, cost of services, commercial and industrial financing and labor costs. A decrease in the average duration of unemployment also pushed up the index. The average prime rate charged by banks and inventories held steady.