NEW YORK - The composite index of Leading Economic Indicators grew 1.0% in December, the Conference Board reported Thursday.
The coincident index grew 0.2% in December, after an unrevised 0.1% increase in November, while the lagging index grew 0.3% after an unrevised 0.1% decline in November.
LEI rose an unrevised 1.1% in December.
The LEI stands at 112.4, the coincident index is at 101.9 and the lagging index is at 108.4. The LEI has a baseline of 100, which reflects the level in 2004.
Economists polled by Thomson Reuters predicted LEI would be up 0.6% in the month.
“The four-month rise suggest the economy now has some wind in its sails; however, it still faces some strong headwinds in the medium-term,” said the Conference Board economist Ken Goldstein. “Overall economic activity is likely to continue to gain momentum in 2011.”
“While the LEI points to an economic expansion that is gaining further traction, its components still suggest the expansion path may be uneven,” according to the Conference Board Economist Ataman Ozyildirim. “December’s gain was led by housing permits, the interest rate spread, initial claims for unemployment and consumer expectations. The large increases in December and November show that, after a brief pause in the second quarter of 2010, the LEI is resuming the upward trend that began in March 2009.”
Six of the 10 indicators that comprise the LEI rose in December: Building permits, interest rate spread, average weekly initial claims for unemployment insurance, stock prices, index of consumer expectations, and manufacturers' new orders for nondefense capital goods. Index of supplier deliveries, and manufacturers' new orders for consumer goods and materials were negative. Real money supply, and average weekly manufacturing hours were flat in the month.
The coincident index saw industrial production, employees on nonagriculutural payrolls, personal income less transfer payments, and manufacturing and trade sales all rise in the month.
The lagging index saw positives from commercial and industrial loans outstanding, and change in CPI for services. Average duration of unemployment, change in labor cost per unit of output, and ratio of consumer installment credit outstanding to personal income were negative. Average prime rate charged by banks, and the ratio of manufacturing and trade inventories to sales were flat in the month.
