The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.6 percent in July, following no change in June and a 0.3 percent increase in May. The Coincident Economic Index increased 0.2 percent, and the lagging economic index declined 0.2 percent.
The LEI now stands at 96.0 (2004=100). Eight of the 10 indicators that make up The Conference Board LEI for the U.S. increased in July. The financial components, building permits and the ISM new orders index made the largest positive contributions to the index. In the six-month period ending July 2013, the leading economic index increased 2 percent (about a 4.1 percent annual rate), faster than the growth of 1.1 percent (about a 2.2 percent annual rate) during the previous six months.
“Following moderate growth in the last few months, the U.S. LEI picked up in July, with widespread gains among its components," says Ataman Ozyildirim, economist at The Conference Board. "The pace of the LEI’s growth over the last six months has nearly doubled, pointing to a gradually strengthening expansion through the end of the year. In July, average workweek in manufacturing was the weakest component.”
The Conference Board CEI for the U.S., a measure of current economic activity, now stands at 106.3 (2204=100). The index rose 1.6 percent (about a 3.3 percent annual rate) between January and July 2013, much faster than the growth of 0.3 percent (about a 0.6 percent annual rate) for the previous six months. Strengths among the coincident indicators have remained very widespread, with all components advancing over the past six months.
The lagging economic index declined to 118.2 (2004 = 100) last month. As a result, the coincident-to-lagging ratio increased slightly. Real GDP expanded at a 1.7 percent annual rate in the second quarter of the year, after increasing at a 1.1 percent annual rate in the first quarter.
Taken together, recent improvements in the LEI and CEI suggest that the expansion in economic activity should continue through the end of the year, and that the pace of growth might even moderately accelerate.
“The improvement in the LEI, and pick up in the six-month growth rate, suggest better economic and job growth in the second half of 2013," says Ken Goldstein, economist at The Conference Board. "However, the biggest uncertainties remain the pace of business spending and the impact of slower global growth on U.S. exports.”
