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 9/18/08 For Aug 2008 | ||||||||||||
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Highlights
The Conference Board's leading indexes are pointing to possible recession in the fourth quarter, not necessarily recession in the third quarter. The index of leading economic indicators fell a steep 0.5 percent in August on top of July's even steeper 0.7 decline. But these readings are aimed at predicting economic activity three to six months ahead. The index of coincident economic indicators, aimed at pegging current activity, slipped only very slightly by 0.1 percent and follows a no-change reading in July. These results suggest that the economy may be able to skirt recession in the ongoing quarter, perhaps a surprise given weakness in retail sales so far in the quarter.
The text of the report warns that ongoing turmoil in the financial markets may offset the benefit from lower oil prices. It also warns that the marginal degree of economic growth gives little cushion for financial shocks. The report concludes that the economy may not see improvement until the second half of next year.
The Conference Board's index of leading indicators plunged 0.7 percent in July, skewed lower by a drop in building permits tied to one-time effects from New York City. But other components were lower as well including stock prices and jobless claims. However, the coincident indicator, closely watched for signals on recession, rose 0.1 percent in July following no change in June. This indicator suggests the economy continues to skirt recession.
Leading indicators Consensus Forecast for August 08: -0.2 percent
Range: -0.4 to 0.0 percent
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