NEW YORK - The composite index of Leading Economic Indicators rose 0.5% in November following a 0.9% surge in October, the Conference Board reported Thursday.
The coincident index grew 0.1% in November after a 0.2% gain in October, while the lagging index rose 0.1% after a 0.6% increase in October.
The LEI stands at 118.0, the coincident index is at 103.7 and the lagging index is at 110.9. The LEI has a baseline of 100, which reflects the level in 2004.
Economists polled by Thomson Reuters predicted LEI would be up 0.3% in the month.
“The LEI is pointing to continued growth this winter, possibly even gaining momentum by spring,” said the Conference Board economist Ken Goldstein. “For the second month in a row, building permits made a relatively strong contribution and there is a chance that the long decline in housing is finally slowing. However, this somewhat positive outlook for the domestic economy is at odds with a global economy that appears to be losing steam. In particular, a deeper-than-expected recession in Europe could easily derail the outlook for the U.S. economy.”
“November’s increase in the LEI for the U.S. was widespread among the leading indicators and continues to suggest that the risk of an economic downturn has receded,” according to the Conference Board Economist Ataman Ozyildirim. “Interest rate spread and housing permits made the largest contributions to the LEI this month, overcoming a falling average workweek in manufacturing, which reversed its October gain. The CEI also rose on improving employment and personal income although industrial production fell in November.”
Seven of the 10 indicators that comprise the LEI rose in November: interest rate spread, building permits, real money supply, index of consumer expectations, average weekly initial claims for unemployment insurance, stock prices, and manufacturers' new orders for nondefense capital goods. . Average weekly manufacturing hours, index of supplier deliveries, and manufacturers' new orders for consumer goods and materials were negative.
The coincident index saw personal income less transfer payments, employees on nonagricultural payrolls, and manufacturing and trade sales rise in the month. Industrial production was negative.
The lagging index saw positives from commercial and industrial loans outstanding, and change in labor cost per unit of output in manufacturing. Average duration of unemployment, and change in CPI for services were negative. The ratio of consumer installment credit outstanding to personal income., average prime rate charged by banks, and the ratio of manufacturing and trade inventories to sales were flat in the month.
