Conference Board Leading Economic Index: "Continued Economic Growth"
The Latest Conference Board Leading Economic Index (LEI) for March increased to 126.7 from 126.2 in February. The 0.4 percent month-over-month gain beat the 0.2 percent increase forecast by Investing.com.
The Conference Board LEI for the U.S. increased again in March, with the majority of its components making positive contributions except for average weekly manufacturing hours and weekly initial claims for unemployment insurance (inverted). In the six-month period ending March 2017, the leading economic index increased 2.4 percent (about a 4.9 percent annual rate), much faster than its growth of 1.1 percent (about a 2.1 percent annual rate) during the previous six months. In addition, the strengths among the leading indicators have become very widespread. [Full notes in PDF]
Here is a log-scale chart of the LEI series with documented recessions as identified by the NBER. The use of a log scale gives us a better sense of the relative sizes of peaks and troughs than a more conventional linear scale.
For additional perspective on this indicator, see the latest press release, which includes this overview:
“The March increase and upward trend in the U.S. LEI point to continued economic growth in 2017, with perhaps an acceleration later in the year if consumer spending and investment pick up,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The gains among the leading indicators were very widespread, with new orders in manufacturing and the interest rate spread more than offsetting declines in the labor market components in March.”
For a better understanding of the relationship between the LEI and recessions, the next chart shows the percentage-off the previous peak for the index and the number of months between the previous peak and official recessions.