The Conference Board Leading Economic Index (LEI) for the U.S. improved 0.6% over last month. The index growth has been on a solid growth trend.
This index is designed to forecast the economy six months in advance. The market expected growth of 0.3% to 0.7% (consensus 0.6%) in the LEI (versus the 0.6% reported).
ECRI's Weekly Leading Index (WLI) is forecasting economic softness over the next six months.
Additional comments from the economists at The Conference Board add context to the index's behavior.
The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.6 percent in November to 105.5 (2004 = 100), following a 0.6 percent increase in October, and a 0.8 percent increase in September.
“The increase in the LEI signals continued moderate growth through the winter season,” said Ken Goldstein, Economist at The Conference Board. “The biggest challenge has been, and remains, more income growth. However, with labor market conditions tightening, we are seeing the first signs of wage growth starting to pick up.”
“Widespread and persistent gains in the LEI point to strong underlying conditions in the U.S. economic expansion,” said Ataman Ozyildirim, Economist at The Conference Board. “The current situation, measured by the coincident economic index, has been improving steadily, with employment and industrial production making the largest contributions in November.”
The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.4 percent in November to 110.7 (2004 = 100), following a 0.2 percent increase in October, and a 0.3 percent increase in September.
The LEI which shows the index at levels below the pre-2007 recession – as well as showing some turbulence in the indicator's post recession climb:
/images/z conference1.png
LEI as an Economic Monitoring Tool:
The usefulness of the LEI is not in the headline graphics but by examining its trend behavior. Econintersect contributor Doug Short (Advisor Perspectives / dshort.com) produces two trend graphics. The first one shows the year-over-year growth, as well as the three month rolling average of the rate of change – shown against the NBER recessions.
