U.S. Economy On Track To Continue Growth Through Year End
The Conference Board’s Leading Economic Index (LEI) for the U.S. rose 0.6 percent in July to 110.7, following increases of 0.4 percent in June and 0.1 percent in May.
“The U.S. LEI increased in July, suggesting the U.S. economy will continue expanding at a solid pace for the remainder of this year,” says Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “The strengths among the components of the leading index were very widespread, with unemployment claims, the financial components, and the ISM New Orders Index making the largest positive contributions.”
The Conference Board’s Coincident Economic Index (CEI), a measure of current economic activity, also increased in July, rising 0.2 percent to 104.2, following a 0.3 percent increase in June and a 0.1 percent increase in May. Its Lagging Economic Index, an indicator representing changes that come only after the economy has begun to follow a particular trend, slipped 0.2 percent in July to 105.2, after an increase of 0.2 percent in June and a 0.5 percent increase in May.
The Conference Board’s indexes are composites of leading, coincident and lagging economic indicators designed to highlight peaks and troughs in the business cycle that could be obscured by volatility within individual components. The LEI is comprised of 10 indicators. These include average weekly hours, manufacturing; average weekly initial claims for unemployment insurance; manufacturers’ new orders, consumer goods and materials; the Institute of Supply Management Index of New Orders; manufacturers' new orders, nondefense capital goods excluding aircraft orders; building permits, new private housing units; stock prices, 500 common stocks; the Leading Credit Index; the interest rate spread, 10-year Treasury bonds less federal funds; and average consumer expectations for business conditions.