An index forecasting economic performance in the United States has rebounded, signaling continued, but slow, growth in the months ahead.
The Conference Board reported that its Leading Economic Index (LEI) increased four-tenths of a percent to 95.8 in July, erasing a four-tenths of a percent decline in June.
Separate measures of current and past economic performance also increased in July.
“The indicators point to slow growth through the end of 2012,” said Ken Goldstein, an economist with the Conference Board, a business research and networking group.
“Lack of domestic spending remains a big issue. However, back-to-school sales are better than expected, suggesting that the consumer is starting to come back. Retail sales this time of year are often an indicator of how the holiday season will turn out,” Goldstein added.
Based on revised information, the LEI has advanced 1.2 percent over the six-month period ending in July, a pace four-times faster than the previous six months. However, strengths among the leading indicators have become less widespread.
“The LEI’s six-month growth rate seems to be stabilizing, pointing to a continuing, but slow, expansion in economic activity for the rest of the year,” said Ataman Ozyildirim, another economist at the Conference Board.
For July, seven of 10 components of the LEI advanced, including building permits, interest rate spread, a leading credit index, new orders for both capital and consumer goods and stock prices. What’s more, initial claims for unemployment insurance declined. Meanwhile, two components of the LEI retreated in July: consumer expectations and an index of new factory orders. Average weekly manufacturing hours held steady.
The Coincident Economic Index (CEI), a measure of current economic performance, rose three-tenths of a percent to 105.1 in July. The CEI has advanced
1 percent over the past three months and 1.4 percent over the past six months.
For July, all four components of the CEI increased: industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index (LAG), a measure of past economic performance, increased four-tenths of a percent to 116 in July. The LAG has advanced eight-tenths of a percent over the past three months.
For July, four of seven components of the LAG increased: consumer credit, commercial and industrial financing and labor costs. The average duration of unemployment decreased. Inventories and the average prime rate charged by banks remained unchanged.