January 2019 Leading Economic Index Marginally Declined But Data Affected By Government Shutdown

The Conference Board Leading Economic Index (LEI) for the U.S marginally declined this month - and the authors say "The Conference Board forecasts that US GDP growth will likely decelerate to about 2 percent by the end of 2019".

Analyst Opinion of the Leading Economic Index

Because of the significant backward revisions, current data cannot be trusted. And this month, there are even bigger caveats. From the Conference Board:

NOTE: Please note that due to the recent government shutdown, data for three US LEI components - manufacturers' new orders for consumer goods and materials, manufacturers' new orders for nondefense capital goods excluding aircraft and building permits - were not available for several of the recent months. The Conference Board has used its standard procedure of statistical imputations to fill in the missing data in order to publish a preliminary Leading Economic Index. The Conference Board will be issuing an interim release on March 4th, once these data are published.

This month's release incorporates annual benchmark revisions to the composite economic indexes. The benchmark usually takes place in January but was postponed due to the government shutdown. These regular benchmark revisions bring the indexes up-to-date with revisions in the source data. The revisions do not change the cyclical properties of the indexes. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are incorporated when the benchmark revision is made, and the entire histories of the indexes are recomputed. As a result, the revised indexes and their month-over-month changes will no longer be directly comparable to those issued prior to the benchmark revision. For more information, please visit our website at http://www.conference-board.org/data/bci.cfm or contact indicators@conference-board.org.

This index is designed to forecast the economy six months in advance. The market (from Econoday) expected this index's month-over-month change at +0.0 % to 0.2 % (consensus +0.2 %) versus the -0.1 % reported.

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