Leading Indicators Increase 0.3% to 110.2 in August

The composite index of leading economic indicators rose for the second straight month in August, increasing 0.3% to 110.2, the Conference Board reported Thursday.

The gain followed an unrevised 0.1% uptick the previous month. Economists polled by Thomson Reuters predicted the LEI would be up 0.1% in August.

The LEI has a baseline of 100, which reflects the level in 2004. Seven of the 10 indicators that comprise the LEI made positive contributions to the composite index in August. Interest rate spread, real money supply, manufacturing hours, building permits, stock prices, consumer expectations, and new factory orders for nondefense capital goods all posted increases. New unemployment claims, supplier deliveries, and new factory orders for consumer goods and materials were negative contributors.

The coincident index was unchanged and follows a revised 0.1% gain in July. The lagging index rose 0.2% after gaining 0.4% in July.

Ken Goldstein, chief economist at the Conference Board, said that the August LEI report suggests little change in economic conditions in the next few months.

“While the recession officially ended in June 2009, the recent pace of growth has been disappointingly slow, fueling concern that the economic recovery could fade and the U.S. could slide back into recession,” he said, noting that the report indicates we can “expect more of the same —  a weak economy with little forward momentum through 2010 and early 2011.”

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