Conference Board Leading Economic Index: "Economic Growth May Be Peaking"

The latest Conference Board Leading Economic Index (LEI) for December decreased fractionally to 111.7 from 111.8 in November. The Coincident Economic Index (CEI) came in at 105.1, up from 104.9 the previous month.

Please note that due to the government shutdown, data for manufacturers’ new orders for consumer goods and materials for November and December and building permits were not published for December. The Conference Board has forecasted these series in order to publish a preliminary Leading Economic Index. Data for manufacturers’ new orders for nondefense capital goods excluding aircraft for November are from the advance report for Manufacturers’ Shipments, Inventories & Orders. In addition, The Conference Board is postponing the regularly scheduled annual benchmark revision of the composite indicators until all underlying data are available.

The Conference Board LEI for the U.S. declined slightly in December, according to preliminary estimates. Large negative contributions from stock prices and the ISM® New Orders Index more than offset the large positive contribution from average weekly unemployment claims. In the second half of 2018, the leading economic index increased 1.5 percent (about a 3.1 percent annual rate), slower than the growth of 2.7 percent (about a 5.5 percent annual rate) during the first half of the last year. However, the strengths among the leading indicators remain more widespread that the weaknesses.

The Conference Board CEI for the U.S., a measure of current economic activity, increased in December. The coincident economic index rose 1.2 percent (about a 2.3 percent annual rate) between June and December 2018, slower than the growth of 1.0 percent (about a 2.0 percent annual rate) in the first half of 2018. However, the strengths among the coincident indicators have remained very widespread, with all components advancing over the past six months. The lagging economic index continued to increase, but at a faster rate than the CEI. As a result, the coincidentto-lagging ratio is down moderately. Real GDP expanded at a 3.4 percent annual rate in the third
quarter of 2018, after increasing 4.2 percent (annual rate) in the second quarter. [Full notes in PDF]

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