NEW YORK - The composite index of Leading Economic Indicators grew 0.3% in August, the Conference Board reported Thursday.
The coincident index grew 0.1% in August after a revised 0.1% gain in July, originally reported as a 0.3% gain, while the lagging index rose 0.3% after a revised 0.3% increase in July, originally reported as a 0.2% gain.
LEI grew a revised 0.6% in July, originally reported as a 0.5% jump.
The LEI stands at 116.2, the coincident index is at 103.3 and the lagging index is at 110.3. The LEI has a baseline of 100, which reflects the level in 2004.
Economists polled by Thomson Reuters predicted LEI would be up 0.1% in the month.
“There is growing risk that sustained weak confidence could put downward pressure on demand and business activity, causing the economy to potentially dip into recession,” said the Conference Board economist Ken Goldstein. “While the chance of that happening remains below 50-50, the odds have certainly increased in recent months.”
“The August increase in the U.S. LEI was driven by components measuring financial and monetary conditions, which offset substantially weaker components measuring expectations,” according to the Conference Board Economist Ataman Ozyildirim. “The growth trend in the LEI has moderated and positive and negative contributors to the index have been roughly balanced. The leading indicators point to rising risks and volatility, and increasing concerns about the health of the expansion.”
Four of the 10 indicators that comprise the LEI rose in August: real money supply, interest rate spread, building permits and index of supplier deliveries. Stock prices, index of consumer expectations, average weekly manufacturing hours, average weekly initial claims for unemployment insurance, manufacturers' new orders for nondefense capital goods, and manufacturers' new orders for consumer goods and materials were negative.
The coincident index saw personal income less transfer payments, industrial productionand manufacturing and trade sales rise in the month. Employees on nonagricultural payrolls was flat.
The lagging index saw positives from commercial and industrial loans outstanding, average duration of unemployment, and ratio of consumer installment credit outstanding to personal income. Change in labor cost per unit of output, and change in CPI for services were negative. Average prime rate charged by banks, and the ratio of manufacturing and trade inventories to sales were flat in the month.
