Leading indicators rise in December
The Conference Board’s Leading Economic Index (LEI) for the United States rose 0.5% in December to 93.9. The base year for the index is 2004. The LEI was flat in November and increased 0.3% in October.
The sharp increase in the LEI resulted primarily from a large improvement in initial unemployment claims and positive contributions from the interest rate spread and Leading Credit Index, says Ataman Ozyildirim, The Conference Board economist. The increase brought the LEI’s six-month growth rate well above zero as about two-thirds of the index’s components advanced. Consumer expectations and manufacturers’ new orders remain weak, however, Ozyildirim says.
“The latest data suggest that a pickup in domestic growth is now more likely, compared to a few months ago, says The Conference Board economist Ken Goldstein. “Housing, which has long been a drag, has turned into a positive for growth, and will help improve consumer balance sheets and strengthen consumption. However, for growth to gain more traction we also need to see better performance on new orders and an acceleration in capital spending.”