The US Leading Economic Index (LEI) increased 0.1 per cent in February, following a 0.3 per cent gain in January, and a 1.2 per cent rise in December. Today's report issued by the New York-based private sector organisation, the Conference Board, indicates a slow recovery.

Ataman Ozyildirim, economist at the Conference Board: said “The LEI for the US has risen rapidly for almost a year now and it has reached its highest level. But, the sharp pick up in the LEI appears to be stabilizing. As the economy moves from recovery into early phases of an expansion, the leading economic index points to moderately improving economic conditions in the near term. Correspondingly, the coincident economic index has been rising since July 2009, albeit slightly because of continued weakness in employment.”

Ken Goldstein, another economist at the Conference Board added: “The indicators point to a slow recovery this summer. Going forward, the big question remains the strength of demand. Without increased consumer demand, job growth will likely be minimal over the next few months.”

The Conference Board Coincident Economic Index (CEI) rose 0.1 per cent in February, following no change in January, and a 0.1 per cent increase in December. The Lagging Economic Index (LAG) increased 0.3 per cent in February, following a 0.2 per cent decline in January, and a 0.4 per cent decline in December.

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

Three of the four indicators that make up CEI increased in February. The positive contributors to the index - - beginning with the largest positive contributor - - were personal income less transfer payments, industrial production, and manufacturing and trade sales. Employees on nonagricultural payrolls declined in February.

The LAG stands at 108.0 (2004=100) in February, with three of the seven components advancing. The positive contributors to the index - - beginning with the largest positive contributor - - were change in labour cost per unit of output, average duration of unemployment (inverted), and ratio of consumer installment credit to personal income. Commercial and industrial loans outstanding declined in February. The ratio of manufacturing and trade inventories to sales, average prime rate charged by banks, and change in CPI for services held steady in February. Based on revised data, the lagging economic index decreased 0.2 per cent in January and decreased 0.4 per cent in December.