Bloomberg / Index of Leading Economic Indicators Declines
Bloomberg reported that The Conference Board’s index of U.S. Leading Economic Indicators fell 0.2% in June. This follows a 0.5% increase in the index in May and a decrease of 0.1% in April. Leading economic indicators are often used for short term (3-6 month) forecasts and this reading signifies that economic activity in the United States may be slowing after a rebound off of the lows seen during late 2008 and early 2009.
Though growth is expected to slow according to the index of U.S. Leading Economic Indicators, there is an old axiom that economists have predicted 9 of the last 7 recessions. This is an important reminder that forecasts are rarely if ever 100% accurate and reality can play out differently than economic predictions.
Below are the ten components of The Conference Board Leading Economic Index® for the U.S.
Average weekly hours, manufacturing
Average weekly initial claims for unemployment insurance
Manufacturers new orders, consumer goods and materials
Index of supplier deliveries vendor performance
Manufacturers’ new orders, nondefense capital goods
Building permits, new private housing units
Stock prices, 500 common stocks
Interest rate spread, 10-year Treasury bonds less federal funds
Index of consumer expectations
(Links were added by author of this post and may not be exact measures used by the Conference Board)