Leading Indicators
US LEI Dips Slightly
17 May, 2012
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The Conference Board Leading Economic Index® (LEI) for the U.S. declined 0.1 percent in April to 95.5 (2004 = 100), following a 0.3 percent increase in March, and a 0.7 percent increase in February.
Says Ataman Ozyildirim, economist at The Conference Board: “The LEI declined slightly in April. Falling housing permits, rising initial claims for unemployment insurance and subdued consumer expectations offset small gains in the remaining components. The LEI’s six-month growth rate fell slightly, but remains in expansionary territory and well above its growth at the end of 2011. The CEI, a measure of current economic conditions, has also increased for five consecutive months.”
Says Ken Goldstein, economist at The Conference Board: “The indicators reflect an economy that’s still struggling to gain momentum. Growth is slow, but choppy, and consumers, executives and investors are looking for more progress.”
The Conference Board Coincident Economic Index®(CEI) for the U.S. increased 0.2 percent in April to 104.3 (2004 = 100), following a 0.2 percent increase in March, and a 0.1 percent increase in February.
The Conference Board Lagging Economic Index® (LAG) increased 0.5 percent in April to 114.9 (2004 = 100), following a 0.3 percent increase in March, and a 0.2 percent increase in February.
About The Conference Board Leading Economic Index® (LEI) for the U.S.
The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The leading, coincident, and lagging economic indexes are essentially composite averages of several individual leading, coincident, or lagging indicators. They are constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component – primarily because they smooth out some of the volatility of individual components.
The ten components of The Conference Board Leading Economic Index® for the U.S. include:
Average weekly hours, manufacturing
Average weekly initial claims for unemployment insurance
Manufacturers’ new orders, consumer goods and materials
ISM Index of New Orders
Manufacturers’ new orders, nondefense capital goods excluding aircraft orders
Building permits, new private housing units
Stock prices, 500 common stocks
Leading Credit Index™
Interest rate spread, 10-year Treasury bonds less federal funds
Average consumer expectations for business conditions
For full press release and technical notes:
www.conference-board.org/data/bcicountry.cfm?cid=1
For more information about The Conference Board global business cycle indicators:
www.conference-board.org/data/bci.cfm
About The Conference Board
The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.
www.conference-board.org
The next release is scheduled for Thursday, June 21, 2012 at 10 A.M. ET
China
China LEI Increases
21 May, 2012
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The Conference Board Leading Economic Index® (LEI) for China increased 0.8 percent in April to 232.4 (2004 = 100), following a 0.8 percent increase in March and a 1.0 percent increase in February. Four of the six components contributed positively to the index in April.
Download a PDF of the technical notes for underlying detail, diffusion indexes, components, contributions and graphs in Chinese.
Download a PDF of the press release in Chinese.
Says Andrew Polk, resident economist at The Conference Board China Center in Beijing: “The China LEI in April once again sends a mixed message. While the composite index continued to increase, the strength in the underlying indicators was very much concentrated in bank loans and consumer sentiment. However, leading indicators in manufacturing and real estate sectors showed significant slowing in April. In contrast to the LEI, the coincident economic index for China, which looks at current economic conditions, fell for the second time in the last six months, with key indicators such as electricity production and industrial output declining. Thus, while the top line LEI growth continues to signal a moderate expansion ahead, the pattern of offsetting strengths and weaknesses among the underlying indicators suggests volatility and uncertainty, exacerbating weakening current conditions in the economy.”
The Conference Board Coincident Economic Index® (CEI) for China, which measures current economic activity, declined 0.8 percent in April to 216.0 (2004 = 100), following a 0.6 percent increase in March and a 3.9 percent increase in February. Three of the five components contributed positively to the index in April.
The Conference Board LEI for China aggregates six economic indicators that measure economic activity in China. Each of the LEI components has proven accurate on its own. Aggregating individual indicators into a composite index filters out so-called “noise” to show underlying trends more clearly.
About The Conference Board Leading Economic Index® (LEI) for China
The Conference Board Leading Economic Index® for China was launched in May 2010. Plotted back to 1986, this index has successfully signaled turning points in the economic cycles of China.
The Conference Board also produces LEIs for Australia, the Euro Area, France, Germany, Japan, Korea, Mexico, Spain, the United Kingdom, and the United States.
The six components of The Conference Board Leading Economic Index®(LEI) for China include:
Total Loans Issued by Financial Institutions (source: People’s Bank of China)
5000 Industry Enterprises Diffusion Index: Raw Materials Supply Index (source: People’s Bank of China)
NBS Manufacturing PMI Sub-Indices: PMI Supplier Deliveries (source: National Bureau of Statistics)
Consumer Expectations Index (source: National Bureau of Statistics)
Total Floor Space Started (source: National Bureau of Statistics)
NBS Manufacturing PMI Sub-Indices: Export Orders (source: National Bureau of Statistics)
For more information including full press release and technical notes:
www.conference-board.org/data/bcicountry.cfm?cid=11
To view The Conference Board calendar of 2012 indicator releases:
www.conference-board.org/data/
About The Conference Board
The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. For additional information about The Conference Board and how it can meet your needs, visit our website at
www.conference-board.org.
The next release is scheduled for Friday, June 22 at 10:00 AM Beijing Time; Thursday, June 21 at 10:00 P.M. US time.
Japan
Japan LEI Increases
15 May, 2012
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The Conference Board Leading Economic Index® (LEI) for Japan increased 0.9 percent The Conference Board Coincident Economic Index® (CEI) decreased 0.1 percent in March.
- The Conference Board LEI for Japan increased again in March. New orders for machinery and construction* made the largest positive contribution to the index, but this month’s gains were fairly widespread across all components. Between September 2011 and March 2012, the leading economic index increased by 3.3 percent (about a 6.7 percent annual rate), an improvement from the decline of 1.9 percent (about a -3.7 percent annual rate) for the previous six months. In addition, the strengths among the leading indicators have remained widespread in recent months.
- The Conference Board CEI for Japan, a measure of current economic activity, fell slightly in March as employment and the retail, wholesale, and manufacturing sales* component both declined. The coincident economic index increased by 0.9 percent (about a 1.9 percent annual rate) between September 2011 and March 2012, slower than the increase of 3.2 percent (about a 6.5 percent annual rate) for the previous six months. However, the strengths among the coincident indicators have been very widespread in recent months. Meanwhile, real GDP declined by 0.8 percent (annual rate) in the fourth quarter of 2011, following a 7.1 percent (annual rate) increase in the third quarter of the year.
- The Conference Board LEI for Japan continued to improve through March and has returned to its pre-earthquake level reached in February 2011. The six-month growth of the index has also picked up as a result. Meanwhile, The Conference Board CEI for Japan declined slightly after three consecutive gains, and its six-month growth remains slower than the second half of last year. Taken together, the composite indexes and their components continue to suggest that the contraction of real GDP seen at the end of 2011 is likely to be temporary and economic activity is likely to pick up somewhat in the coming months.
LEADING INDICATORS.
Eight of the ten components that make up The Conference Board LEI for Japan increased in March. The positive contributors to the index – in order from the largest positive contributor to the smallest – include the new orders for machinery and construction component*, the (inverted) business failures, interest rate spread, the Tankan business conditions survey, stock prices, real money supply, the index of overtime worked, and the six month growth rate of labor productivity. The negative contributors were dwelling units started and real operating profits*.
With the increase of 0.9 percent in March, The Conference Board LEI for Japan now stands at 96.9 (2004=100). Based on revised data, this index increased 0.8 percent in February and increased 0.1 percent in January. During the six-month span through March, the index increased 3.3 percent, and nine of the ten components advanced (diffusion index, six-month span equals 95.0 percent).
COINCIDENT INDICATORS.
Two of the four components that make up The Conference Board CEI for Japan decreased in March. The positive contributors to the index include industrial production and wage and salary income. Number of employed persons and the retail, wholesale, and manufacturing sales* component declined in March.
With the decrease of 0.1 percent in March, The Conference Board CEI for Japan now stands at 98.1 (2004=100). Based on revised data, this index increased 0.2 percent in February and increased 0.4 percent in January. During the six-month span through March, the index increased 0.9 percent, and all four components advanced (diffusion index, six-month span equals 100.0 percent).
DATA AVAILABILITY AND NOTES.
The data series used to computeThe Conference Board Leading Economic Index® (LEI) for Japan and The Conference Board Coincident Economic Index® (CEI) for Japan reported in this release are those available “as of” 5:00 P.M. ET May 14, 2012. Some series are estimated as noted below.
* The series in The Conference Board LEI that are based on our estimates are real operating profits and new orders for machinery. The series in The Conference Board CEI that is based on our estimates is real manufacturing sales.
**According to The Statistics Bureau and the Director-General for Policy Planning of Japan, figures in the Number of Employed Persons series from the three regions (Iwate, Miyagi and Fukushima) affected by the March 11th earthquake were missing from March through August 2011. From September 2011 on, this series again includes data for the whole of Japan. Thus, this series shows a sharp decline in March 2011 and a substantial gain in September 2011.
The next release is scheduled for Wednesday, June 13 at 10:00 AM (JST); Tuesday, June 12, at 9:00 PM (ET)
United Kingdom
UK LEI Increases
15 May, 2012
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The Conference Board Leading Economic Index® (LEI) for the U.K. increased 1.0 percent in March, after an increase of 1.0 percent in February and an increase of 0.7 percent in January. Five of the seven components made positive contributions to the index this month. The index stands at 103.6 (2004=100).
Said Jean-Claude Manini, The Conference Board Senior Economist for Europe: “The LEI for the United Kingdom increased sharply for a third consecutive month in March. Improving confidence in the manufacturing sector suggests that output may pick up modestly in the near term. After half a year, the six-month average for the U.K. moved back into positive territory, the last one to do so after the United States, the Euro Area, and Japan. This suggests that mature markets will generally return to slow expansion in the next few months. However, renewed concerns about the outlook for the Euro Area economy, particularly with regard to the health of its banking sector, could pose problems for the U.K. economy, considering its close trading relationship with the Euro Area and the size of its financial sector.”
The Conference Board Coincident Economic Index® (CEI) for the U.K., a measure of current economic activity, increased 0.1 percent in March, after increasing by 0.1 percent in both February and January. Three of the four components made positive contributions to the index this month. The index stands at 102.6 (2004 = 100).
The Conference Board LEI for the U.K. aggregates seven economic indicators that measure activity in the U.K., each of which has proven accurate on its own. Aggregating individual indicators into a composite index filters out so-called “noise” to show underlying trends more clearly.
The seven components of The Conference Board Leading Economic Index® (LEI) for the U.K. include:
Order Book Volume (source: Confederation of British Industry)
Volume of Expected Output (source: Confederation of British Industry)
Consumer Confidence Indicator (source: European Commission)
FTSE All-Share Index (source: FTSE Group)
Yield Spread (source: Bank of England)
Productivity, Whole Economy (Office for National Statistics)
Total Gross Operating Surplus of Corporations (Office for National Statistics)
Plotted back to 1970, this index has successfully signaled turning points in the U.K. business cycles. The Conference Board currently produces leading economic indexes for the Euro Area and nine other countries, including Australia, China, France, Germany, Japan, Korea, Mexico, Spain and the U.S.
To view The Conference Board calendar of 2012 indicator releases:
www.conference-board.org/data/
For more information: www.conference-board.org/data/bci.cfm
For full press release: www.conference-board.org/data/bcicountry.cfm?cid=2
About The Conference Board
The Conference Board is an independent business membership and research association working in the public interest. Our mission is unique: To provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.
www.conference-board.org.
The next release is scheduled for Thursday, June 14, 2012 at 10:00 AM GMT (5:00 AM ET).
Baltic Dry Index
[SOURCE: Bloomberg.com]
Gregg D. Killoren
victoria1014
