US Economy Enjoys an Upswing

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.4 percent in August to 111.2 (2016 = 100), following a 0.7 percent increase in July, and a 0.5 percent increase in June. The leading economic index is now well above its previous peak (March 2006, 102.4).

“The leading indicators are consistent with a solid growth scenario in the second half of 2018 and at this stage of a maturing business cycle in the US, it doesn’t get much better than this,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The US LEI’s growth trend has moderated since the start of the year. Industrial companies that are more sensitive to the business cycle should be on the lookout for a possible moderation in economic growth in 2019. The strengths among the LEI’s components were very widespread, further supporting an outlook of above 3.0 percent growth for the remainder of 2018.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in August to 104.3 (2016 = 100), following a 0.2 percent increase in July, and a 0.3 percent increase in June.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased 0.2 percent in August to 105.4 (2016 = 100), following a 0.2 percent decline in July and a 0.2 percent increase in June.

About The Conference Board Leading Economic Index® (LEI) for the U.S.
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:

Average weekly hours, manufacturing
Average weekly initial claims for unemployment insurance
Manufacturers’ new orders, consumer goods and materials
ISM® Index of New Orders 
Manufacturers’ new orders, nondefense capital goods excluding aircraft orders
Building permits, new private housing units
Stock prices, 500 common stocks
Leading Credit Index™
Interest rate spread, 10-year Treasury bonds less federal funds
Average consumer expectations for business conditions.

The Conference Board delivers trusted insights for what’s ahead. We connect senior executives across industries and geographies to share ideas, develop insights, and recommend policy to address key issues. Our mission is to help leaders anticipate what’s ahead, improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. http://www.conference-board.org.

Summary Table of Composite Economic Indexes

2018

6-month

Jun

Jul

Aug

Feb to 
Aug

Leading Index

110.0

110.8

r

111.2

p

  Percent Change

0.5

0.7

r

0.4

p

2.5

  Diffusion

90.0

90.0

70.0

80.0

Coincident Index

103.9

r

104.1

r

104.3

p

  Percent Change

0.3

0.2

0.2

p

1.2

  Diffusion

100.0

100.0

100.0

100.0

Lagging Index

105.4

105.2

105.4

p

  Percent Change

0.2

-0.2

0.2

p

1.0

  Diffusion

42.9

57.1

35.7

64.3

p  Preliminary     r  Revised

Indexes equal 100 in 2016

Source:  The Conference Board

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