NEW YORK - The composite index of Leading Economic Indicators gained 1.0% in September, its sixth straight gain. the Conference Board reported today.
LEI increased a revised 0.4% in August, originally reported as a 0.6% rise.
The coincident index was flat in September, after a revised 0.1% gain in August, originally reported as an unchanged reading, while the lagging index fell 0.3% after a revised 0.2% decline in August, originally reported as a 0.1% drop.
The LEI stands at 103.5, the coincident index is 99.9 and the lagging index is at 109.6.
Economists polled by Thomson Reuters predicted LEI would be up 0.8% in the month.
“With the sixth consecutive increase, the LEI’s six-month growth rate has improved to its highest pace since 1983,” according to the Conference Board Economist Ataman Ozyildirim. “Except for average workweek and building permits, all the leading indicators contributed positively to the index this month. At the same time, the contraction in the coincident economic index has halted in recent months, but the continued downtrend in employment is keeping this index of current economic conditions from rising faster.”
With the six months of LEI increases and the coincident index rising two of the last three readings, the Conference Board Economist Ken Goldstein said, “These numbers strongly suggest that a recovery is developing. However the intensity of that recovery will depend on how much, and how soon, demand picks up.”
Eight of the 10 indicators that comprise the LEI rose in September: interest rate spread, index of consumer expectations, average weekly initial claims for unemployment insurance, stock prices, real money supply, index of supplier deliveries, manufacturers' new orders for nondefense capital goods, and manufacturers' new orders for consumer goods and materials. Average weekly manufacturing hours, and building permits were negative in the month.
The coincident index saw industrial production, personal income less transfer payments and manufacturing and trade sales rise in the month. The negative contributor was employees on non-agricultural payrolls.
The lagging index saw positives from change in CPI for services, and change in labor costs per unit of output. Commercial and industrial loans outstanding, average duration of unemployment, the ratio of consumer installment credit to personal income, and the ratio of manufacturing and trade inventories to sales were negative. The average prime rate charged by banks was flat in the month.
