The US Conference Board Leading Economic Index (LEI) for the US increased 0.6 percent in July, following a 0.8 percent gain in June, and a 1.2 percent rise in May.

Ken Goldstein, Economist at The Conference Board said : “The indicators suggest that the recession is bottoming out, and that economic activity will likely begin recovering soon. The Coincident Economic Index was flat in July – the first time it did not register a decline since October 2008. The Leading Economic Index, which has increased for four consecutive months, suggests that the CEI will turn positive soon.”

The Coincident Economic Index (CEI) was unchanged in July, following 0.4 percent declines in both June and May. The Lagging Economic Index (LAG) declined 0.3 percent in July, following a 0.7 percent decline in June, and a 0.6 percent decline in May.

LEADING INDICATORS:Six of the ten indicators that make up the LEI increased in July.  The positive contributors - - beginning with the largest positive contributor - - were interest rate spread, average weekly initial claims for unemployment insurance (inverted),  average weekly manufacturing hours, index of supplier deliveries (vendor performance), stock prices, and manufacturers' new orders for nondefense capital goods.  The negative contributors - - beginning with the largest negative contributor - - were index of consumer expectations, real money supply, and building permits.  The manufacturers' new orders for consumer goods and materials* held steady in July.

The LEI now stands at 101.6 (2004=100).  Based on revised data, this index increased 0.8 percent in June and increased 1.2 percent in May.  During the six-month span through July, the leading economic index increased 3.0 percent, with eight out of ten components advancing (diffusion index, six-month span equals 85 percent).

COINCIDENT INDICATORS: Three of the four indicators that make up CEI increased in July.  The positive contributors to the index - - beginning with the largest positive contributor - - were industrial production, personal income less transfer payments and manufacturing and trade sales.  The negative contributor was employees on nonagricultural payrolls. 

The CEI now stands at 99.7 (2004=100).  This index decreased 0.4 percent in June and decreased 0.4 percent in May.  During the six-month period through July, the coincident economic index decreased 2.7 percent, with none of the four components advancing (diffusion index, six-month span equals 0.0 percent).

LAGGING INDICATORS:  The LAG stands at 110.8 (2004=100) in July, with one of the seven components advancing. The positive contributor to the index was the ratio of consumer installment credit to personal income. The negative contributors - - beginning with the largest negative contributor - - were commercial and industrial loans outstanding, average duration of unemployment (inverted), change in labour cost per unit of output, change in CPI for services and the ratio of manufacturing and trade inventories to sales. The average prime rate charged by banks held steady in July.  Based on revised data, the lagging economic index decreased 0.7 percent in June and decreased 0.6 percent in May.

Series in LEI based on estimates are manufacturers' new orders for consumer goods and materials, manufacturers' new orders for nondefense capital goods, and the personal consumption expenditure used to deflate the money supply. Series in the CEI that are based on estimates are personal income less transfer payments and manufacturing and trade sales. Series in the LAG that are based on estimates are inventories to sales ratio, consumer installment credit to income ratio, change in labour cost per unit of output, and the personal consumption expenditure used to deflate commercial and industrial loans outstanding.