Leading index seesaws back up

An index forecasting economic conditions in the United States has seesawed back up, pointing to moderate growth could weather challenges from the financial and labor markets.

The Conference Board reported that its Leading Economic Indicator advanced three-tenths of a percent to 123.7 in June. The gain more than offset a two-tenths of a percent decline in May and adds to a half of a percent increase in April.

A separate measure of current economic performance also increased in June, while a measure of past performance slipped.

“While the LEI continues to point to moderating economic growth in the U.S. through the end of 2016, the expansion still appears resilient enough to weather volatility in financial markets and a moderating outlook in labor markets,” said Ataman Ozyildirm, an economist with the Conference Board, a business research and member association.

The Leading Economic Index increased three-tenths of a percent during the first half of the year as weaknesses among the indicators have remained more widespread than strengths.

For June, eight of the 10 indicators of the leading index advanced, including building permits, interest rate spread, a leading credit index, a new orders index as well as new factory orders for both consumer and capital goods and stock prices. A decrease in average weekly initial claims for unemployment insurance also bolstered the index. Average weekly manufacturing hours decreased, while consumer expectations for business conditions held steady.

The Coincident Economic Index, a measure of current conditions, increased three-tenths of a percent to 113.8. The index has increased eight-tenths of a percent over the past six months. For June, all four components of the index advanced: industrial production, payrolls, personal income and sales.

The Lagging Economic Index, a measure of past performance, slipped a tenth of a percent to 121.9. The index has increased a half of a percent over the past three months. For June, three of seven components of the index rose: consumer credit, inventories and the cost of services. Commercial and industrial financing and labor costs decreases, while an increase in the average duration of unemployment also pulled down the index. The average prime rate charged by banks remained unchanged.