Conference Board Leading Economic Index: Pace Slowing In November

The latest Conference Board Leading Economic Index (LEI) for November increased fractionally to 111.8 from a revised 111.6 in October. The Coincident Economic Index (CEI) came in at 104.9, up from 104.7 the previous month.

The Conference Board LEI for the U.S. increased slightly in November. Positive contributions from building permits, the ISM® New Orders Index, the yield spread and consumer expectations for business conditions more than offset the negative contributions from weekly initial claims for unemployment insurance (inverted), stock prices and the average workweek. In the six-month period ending November 2018, the leading economic index increased 2.2 percent (about a 4.4 percent annual rate), slower than the growth of 2.9 percent (about a 5.9 percent annual rate) during the previous six months. However, the strengths among the leading indicators continue to be more widespread than the weaknesses.

The Conference Board CEI for the U.S., a measure of current economic activity, also increased in November. The coincident economic index rose 1.3 percent (about a 2.5 percent annual rate) between May and November 2018, faster than the growth of 0.9 percent (about a 1.8 percent annual rate) for the previous six months. Also, 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 slightly. Real GDP expanded at a 3.5 percent annual rate in the third quarter, after increasing 4.2 percent (annual rate) in the second quarter. [Full notes in PDF]

Here is a log-scale chart of the LEI series with documented recessions as identified by the NBER. The use of a log scale gives us a better sense of the relative sizes of peaks and troughs than a more conventional linear scale.

Conference Board's LEI

 

For additional perspective on this indicator, see the latest press release, which includes this overview:

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