U.S. Leading Index Remains Steady; Comments From Dr. Joe Webb
Press release from the issuing company
Mar. 18, 2004 -- The Conference Board announced today that the U.S. leading index held steady, the coincident index increased 0.3 percent and the lagging index also held steady in February.
The leading index was unchanged in February, but there were also upward revisions to previous months. As a result, the leading index is increasing at a 3.0 to 4.0 percent annual rate, and this growth continues to be widespread.
The coincident index increased again in February, and has now grown at about a 2.0 percent annual rate from its most recent low in April 2003. The growth in the coincident index also has been widespread over the last six months (production, sales, income, and employment).
The upturn in the leading index since March 2003 has been signaling stronger economic growth, and real GDP growth picked up to a 6.1 percent annual rate during the second half of 2003. While the growth rate of the leading index has slowed somewhat in recent months, it is still signaling relatively strong economic growth in the near term.
Comments from Dr. Joe Webb:
"My column will be back next week, but I just couldn't stay away; so here's my take on the latest economic news. The month-late release of the Producer Price Index (PPI) for January spooked a few commentators when it came out higher than expected, but the PPI does not measure the final end-user prices of goods in the same way the Consumer Price Index (CPI ) does. Since transaction processing and promotional expenses are down or more efficient, few, if any,of the increases shown in the PPI actually reach consumers.
"The Conference Board 's Leading Economic Indicators basically moved sideways, and initial unemployment claims were down again, confounding those experts who had forecast an increase. Let's send the experts to the unemployment lines—perhaps they can change careers and become weather forecasters; they're obviously well-qualified!"
Premium Access Members at WhatTheyThink.com can view more analysis in Dr. Joe Webb’s weekly column on Friday, appropriately called "Fridays with Dr. Joe".
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