NEW YORK - The composite index of Leading Economic Indicators gained 0.4% in May, the Conference Board reported today.
LEI was revised to flat in April, originally reported as a 0.1% dip.
The coincident index was up 0.4% in May, after a revised 0.4% increase in April, originally reported as a 0.3% hike, while the lagging index fell 0.1% after a revised unchanged level in April, originally reported as a 0.1% hike.
The LEI stands at 109.5, the coincident index is 100.5 and the lagging index is at 107.9.
Economists polled by Thomson Reuters predicted LEI would be up 0.2% in the month.
“The index points to continued, though slower, U.S. growth for the rest of the year,” said Bart van Ark the Conference Board chief economist. “Public debt and deficits weigh heavily on growth prospects on both sides of the Atlantic. We project a serious slowdown in European growth in 2011, which could further weaken the U.S. outlook.”
“The LEI for the United States has been rising since April 2009, and though its growth rate has slowed in 2010, it is well above its most recent peak in December 2006,” according to the Conference Board Economist Ataman Ozyildirim. “Correspondingly, current economic conditions, as measured by the Conference Board coincident economic index for the United States, have been improving steadily since November 2009, thanks to gains in payroll employment and industrial production.”
Half of the 10 indicators that comprise the LEI rose in May: interest rate spread, real money supply, average weekly manufacturing hours, index of consumer expectations, and manufacturers' new orders for consumer goods and materials. Stock prices, building permits, manufacturers' new orders for nondefense capital goods, index of supplier deliveries, and average weekly initial claims for unemployment insurance were negative.
The coincident index saw industrial production, employees on non-agricultural payrolls, personal income less transfer payments, and manufacturing and trade sales all rise in the month.
The lagging index saw positives from change in labor cost per unit of output, and change in CPI for services. Average duration of unemployment, commercial and industrial loans outstanding, and ratio of consumer installment credit 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.
