The U.S. Leading Index Turns Upward Again After Last Month's Pause
Press release from the issuing company
Apr. 19, 2004 -- The Conference Board announced today that the U.S. leading index increased 0.3 percent, the coincident index increased 0.2 percent and the lagging index decreased 0.1 percent in March.
The leading index turned up again in March after pausing in February. The leading index has now increased by 4.4 percent from its most recent low in March 2003, although growth has slowed somewhat in recent months.
The coincident index continued on its steady upward trend in March. The coincident index has now increased at a 2.2 percent annual rate from its most recent low in April 2003. The growth rate of the coincident index has strengthened in recent months, and this strength has been widespread.
The upturn in the leading index since March 2003 signaled stronger economic growth, and correspondingly, real GDP growth picked up to a 6.2 percent annual rate in the second half of 2003.
The current growth rate of the leading index is signaling a continuation of relatively strong economic growth in the near term.
Leading Indicators. Six of the ten indicators that make up the leading index increased in March. The positive contributors - beginning with the largest positive contributor – were vendor performance, real money supply*, average weekly initial claims for unemployment insurance (inverted), building permits, manufacturers’ new orders for consumer goods and materials*, and index of consumer expectations. The negative contributors - beginning with the largest negative contributor – were interest rate spread, stock prices, average weekly manufacturing hours, and manufacturers’ new orders for nondefense capital goods*.
The leading index now stands at 115.3 (1996=100). Based on revised data, this index remained unchanged in February and increased 0.4 percent in January. During the six-month span through March, the leading index increased 1.8 percent, with seven out of ten components advancing (diffusion index, six-month span equals 70 percent).
Coincident Indicators.Three of the four indicators that make up the coincident index increased in March. The positive contributors to the index - beginning with the largest positive contributor - were employees on nonagricultural payrolls, personal income less transfer payments*, and manufacturing and trade sales*. The negative contributor was industrial production.
The coincident index now stands at 116.4 (1996=100). This index increased 0.3 percent in February and increased 0.1 percent in January. During the six-month period through March, the coincident index increased 1.3 percent.
Lagging Indicators.The lagging index stands at 97.9 (1996=100) in March, with four of the seven components advancing. The positive contributors to the index – beginning with the largest positive contributor – were change in CPI for services, average duration of unemployment (inverted), change in labor cost per unit of output*, and ratio of consumer installment credit to personal income*. The negative contributor was commercial and industrial loans outstanding*. The ratio of manufacturing and trade inventories to sales* and average prime rate charged by banks held steady in March. Based on revised data, the lagging index decreased 0.1 percent in February and increased 0.1 percent in January.
Data Availability and Notes. The data series used by The Conference Board to compute the three composite indexes and reported in the tables in this release are those available “as of” 12 Noon on April 16, 2004. Some series are estimated as noted below.
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