NEW YORK - The composite index of Leading Economic Indicators rose 0.4% in January following a revised 0.5% gain in December, originally reported as a 0.4% increase, the Conference Board reported Friday.
The coincident index grew 0.2% in January after an unrevised 0.3% gain in December, while the lagging index rose 0.4% after an unrevised 0.3% jump in December.
The LEI stands at 94.9, the coincident index is at 103.5 and the lagging index is at 113.8. The LEI has a baseline of 100, which reflects the level in 2004.
Economists polled by Thomson Reuters predicted LEI would be up 0.5% in the month.
“Recent data reflect an economy that started the year on a positive note,” said the Conference Board economist Ken Goldstein. “The CEI shows some small signs of economic strengthening in the fourth quarter and continued to point in this direction in January. The LEI suggests these conditions will continue and could possibly even pick up this spring and summer.”
“This fourth consecutive gain in the LEI reflected fairly widespread strength among its components , pointing to somewhat more positive economic conditions in early 2012,” according to the Conference Board Economist Ataman Ozyildirim. “The LEI’s increase in January was led not only by improving financial and credit indicators, but also rising average workweek in manufacturing. These both offset consumers’ outlook about the economy, which remained pessimistic, though slightly less so. Meanwhile, the CEI rose again in January as employment, income, and sales data all point to improving current economic conditions despite a lock of contribution from industrial production.”
Seven of the 10 indicators that comprise the LEI rose in January: interest rate spread, average weekly manufacturing hours, stock prices, Leading Credit Index (inverted), ISM new orders index, building permits, and manufacturers' new orders for consumer goods and materials. Average consumer expectations for business conditions, average weekly initial claims for unemployment insurance (inverted), and manufacturers' new orders for nondefense capital goods excluding aircraft were negative.
The coincident index saw manufacturing and trade sales, employees on nonagricultural payrolls, and personal income less transfer payments rise in the month. Industrial production was flat.
The lagging index saw positives from ratio of consumer installment credit outstanding to personal income, average duration of unemployment (inverted), change in labor cost per unit of output, manufacturing, commercial and industrial loans outstanding and ratio of manufacturing and trade inventories to sales. Change in CPI for services and average prime rate charged by banks were flat in the month.
