An index forecasting economic conditions in the United States continues to signal growth during the first half of the new year.
The Conference Board reported its Leading Economic Index (LEI) advanced six-tenths of a point to 107 in December. Separate measures of current and past economic performance also increased.
“The U.S. LEI continued rising rapidly in December, pointing to a continuation of strong economic growth in the first half of 2018. The passing of the tax plan is likely to provide even more tailwind to the current expansion,” said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership association.
“The gains among the leading indicators have been widespread, with most of the strength concentrated in new orders in manufacturing, consumers’ outlook on the economy, improving stock markets and financial conditions,” Ozyildirim added.
With gains in each of the last three months, the Leading Economic Index climbed 3.1 percent during the second half of 2017. That’s a faster pace than the 2.6 percent gain during the first half of last year.
Gross domestic product, the broad measure of goods and services produced in the country, grew at an annual rate of
3.2 percent in the third quarter following a 3.1 percent gain in the second quarter.
For December, seven of the 10 indicators of the Leading Economic Index advanced, including consumer expectations, interest rate spread, leading credit and new orders indexes, new orders for consumer and capital goods and stock prices. Average manufacturing hours decreased, while building permits and initial claims for unemployment benefits held steady.
The Coincident Economic Index, a measure of current conditions, increased three-tenths of a point to 102.8. The index has climbed 1.2 percent over the past six months.
For December, all four indicators of the index advanced: industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index, a measure of past performance, increased seven-tenths of a point to 104. The index has climbed 1.1 percent over the past three months.
For December, five of seven indicators of the index advanced, including the average prime rate charged by banks, commercial and industrial financing, consumer credit and the cost of services. A decrease in the average duration of unemployment also boosted the index. Inventories declined, while the cost of labor held steady.