A composite index of ten economic indicators that should lead overall economic activity. This indicator was initially compiled by the Commerce Department but is now compiled and produced by The Conference Board. It has been revised many times in the past 30 years - particularly when it has not done a good job of predicting turning points. Why Investors Care
| Released on 3/20/08 For Feb 2008 | ||||||||||||
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Highlights
The Conference Board's index of leading economic indicators is pointing in the direction of recession with a 0.3 percent decline and followed drops of 0.4 percent in January and 0.1 percent in December. For the latest month, component declines were seen in stock prices, initial unemployment claims, vendor performance, building permits, and consumer expectations. While the component numbers are old news, the index release will increase chatter of the U.S. being in recession. The latest number matched market expectations.
What may be a surprise to many, the coincident index does not yet indicate we are in recession. The coincident index is heavily considered by the National Bureau of Economic Research when marking the start of recession. This index was flat in February, following no change the previous two months. However, this is as close as you can get to recession and not be in recession - and the numbers can be revised, including downward.
The Conference Board's index of leading indicators slipped 0.1 percent in January, reflecting declines in stock prices, capital goods orders, and building permits. While this index is getting a little more attention than usual, many forget to read the whole report which also includes the index of coincident indicators. While not completely definitive, the coincident index carries a lot of weight when the start or end of recession is defined - that is, when is there a new string of negative numbers or a new string of positive numbers? As of January, the coincident index was still positive with a 0.1 percent increase.
Leading indicators Consensus Forecast for February 08: -0.3 percent
Range: -0.6 to 0.0 percent
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