The U.S. leading index, a key barometer of economic conditions, grew 0.2 percent in November after five months of consecutive declines, The Conference Board reported today.
The leading index now stands at 115.2 (1996=100). Based on revised data, this index decreased 0.4 percent in October and decreased 0.2 percent in September. During the six-month span through November, the leading index decreased 1.1 percent, with five out of 10 components advancing.
The weakness in the leading indicators in recent months has become somewhat less widespread. It is too early to conclude that the recent weakness in the leading index was only a pause in the rising trend, but to date the decline was not large enough and did not persist for long enough to signal an end to the current economic expansion.
The growth rate of the leading index has slowed below its long-term trend, but not to a rate historically associated with a recession. The current behavior of the leading index is consistent with the economy continuing to expand in the near term, but more slowly than its long-term trend rate.
Six of the 10 indicators that make up the leading index increased in November. The positive contributors – beginning with the largest positive contributor – were stock prices, real money supply, average weekly initial claims for unemployment insurance (inverted), index of consumer expectations, manufacturers’ new orders for nondefense capital goods, and manufacturers’ new orders for consumer goods and materials. The negative contributors – beginning with the largest negative contributor – were vendor performance, average weekly manufacturing hours, building permits, and interest rate spread.
The coincident index, an index of current economic activity, increased again in November and the strength in the coincident index continues to be widespread. At the same time, real GDP growth in the third quarter was revised up slightly to a 3.9 percent annual rate, a pickup from 3.3 percent growth in the second quarter.
The Conference Board is as nonprofit research and business group.
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