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Leading Economic Index increases third consecutive month

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The Conference Board Leading Economic Index® (LEI) for the United States increased 0.4 percent in April to 101.4 (2004 = 100), following a 1.0 percent increase in March, and a 0.5 percent increase in February.

"The LEI rose for the third consecutive month, driven largely by improving housing and financial market conditions," said Ataman Ozyildirim, economist at The Conference Board. "This latest report suggests the economy will continue to expand, and may even pick up steam through the second half of the year."

"Despite a brutal winter which brought the economy to a halt, the overall trend in the leading economic index has remained positive," said Ken Goldstein, economist at The Conference Board. "If consumers continue to spend, and businesses pick up the pace of investment, the industrial core of the economy will benefit and GDP growth could move closer towards the 3 percent range."

The Conference Board also announced its Coincident Economic Index® (CEI) for the U.S. increased 0.1 percent in April to 108.5 (2004 = 100), following a 0.3 percent increase in March, and a 0.3 percent increase in February.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.2 percent in April to 123.3 (2004 = 100), following a 0.7 percent increase in March, and a 0.2 percent increase in February.

The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The leading, coincident, and lagging economic indexes are essentially composite averages of several individual leading, coincident, or lagging indicators. They are constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component – primarily because they smooth out some of the volatility of individual components.

The ten components of The Conference Board Leading Economic Index® for the U.S. include:

$1·         Average weekly hours, manufacturing

$1·         Average weekly initial claims for unemployment insurance

$1·         Manufacturers' new orders, consumer goods and materials

$1·         ISM® Index of New Orders 

$1·         Manufacturers' new orders, nondefense capital goods excluding aircraft orders

$1·         Building permits, new private housing units

$1·         Stock prices, 500 common stocks

$1·         Leading Credit Index™

$1·         Interest rate spread, 10-year Treasury bonds less federal funds

$1·         Average consumer expectations for business conditions

For more information about The Conference Board global business cycle indicators visit
http://www.conference-board.org/data/bci.cfm

The Conference Board is a global, independent business membership and research association working in the public interest. Its mission is to provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society. 

 

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