Leading Indicators Surged 0.6% in August

The composite index of leading economic indicators gained 0.6% in August, the Conference Board reported yesterday.

The LEI increased a revised 0.9% in July, originally reported as a 0.6% rise.

The coincident index was flat in August, after a revised 0.1% gain in July, originally reported as an unchanged reading, while the lagging index fell 0.1% after a revised 0.5% decline in July, originally reported as a 0.3% drop.

The LEI stands at 102.5, the coincident index is 99.8 and the lagging index is at 110.2.

Economists polled by Thomson Reuters predicted the LEI would be up 0.7% in the month.

“Since reaching a peak in July 2007, the LEI fell for 20 months — the longest downward trend since the mid 1970s — but it has been rising since April and its gains have become very widespread,” according to board economist Ataman Ozyildirim. “The six-month growth rate of the LEI continues to accelerate. At the same time, the downward trend in the coincident economic index, measuring current economic activity, seems to be stabilizing, with the index flat so far this quarter.”

Five of the 10 indicators that comprise the LEI rose in August — the index of supplier deliveries, interest rate spread, stock prices, building permits, and the index of consumer expectations. Real money supply, average weekly initial claims for unemployment insurance, and manufacturers’ new orders for nondefense capital goods were negative in the month. Average weekly manufacturing hours, and manufacturers’ new orders for consumer goods and materials, were flat in the month.

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