March 2021 Leading Economic Index Rose Sharply

The Conference Board Leading Economic Index (LEI) for the U.S increased 1.3 percent in March to 111.6 (2016 = 100), following a 0.1 percent decrease in February and a 0.5 percent increase in January - and the authors say "The improvement in the U.S. LEI, with all ten components contributing positively, suggests economic momentum is increasing in the near term".

Analyst Opinion of the Leading Economic Index

Because of the significant backward revisions, the current values of this index cannot be trusted. My opinion is that the economy entered a recession in March but likely left the depression in June when the economy began to improve.

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 0.4 % to 1.4 % (consensus 0.6 %) versus the reported change of 1.3 %

ECRI's Weekly Leading Index (WLI) is also improving.

Additional comments from the economists at The Conference Board add context to the index's behavior.

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 1.3 percent in March to 111.6 (2016 = 100), following a 0.1 percent decrease in February and a 0.5 percent increase in January.

"The U.S. LEI rose sharply in March, which more than offset February's slightly negative revised figure," said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. "The improvement in the U.S. LEI, with all ten components contributing positively, suggests economic momentum is increasing in the near term. The widespread gains among the leading indicators are supported by an accelerating vaccination campaign, gradual lifting of mobility restrictions, as well as current and expected fiscal stimulus. The recent trend in the U.S. LEI is consistent with the economy picking up in the coming months, and The Conference Board now projects year-over-year growth could reach 6.0 percent in 2021."

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.6 percent in March to 104.0 (2016 = 100), following a 0.1 percent decrease in February and a 0.5 percent increase in January.

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