U.S. Leading Economic Index Ticks Up in December
An economic index that measures U.S. business cycles increased in December for the eighth consecutive month but at a slower pace than that of November, data from the Conference Board showed Thursday.
The Leading Economic index stood at 109.5 in December, up 0.3% compared with November. The rise matches expectations from economists polled by The Wall Street Journal.
In November, the index rose by an upwardly revised 0.7% compared with October.
December posts the eighth straight monthly rise for the index, which in March registered the steepest monthly decline ever amid the hit from the coronavirus pandemic. After rebounding strongly in May and June, the indicator has gradually slowed down, signaling that the initial economic rebound is fading.
“The U.S. LEI’s slowing pace of increase in December suggests that U.S. economic growth continues to moderate in the first quarter of 2021,” Conference Board Senior Director of Economic Research Ataman Ozyildirim said.
The Conference Board Leading Economic Index is based on 10 components, among them initial claims for unemployment insurance, manufacturers’ new orders, building permits of new private housing units, stock prices and consumers expectations. It is intended to signal swings in the business cycle and to smooth out some of the volatility of individual indicators.
Improvements in the U.S. Leading Economic Index were very broad-based among the leading indicators, except for rising initial claims for unemployment insurance and a mixed consumer outlook on business and economic conditions, Mr. Ozyildirim said.
“While the resurgence of Covid-19 and weak labor markets remain barriers to growth, The Conference Board expects the economy to expand by at least 2% (annual rate) in Q1 and then gain momentum throughout the year,” he said.
The Coincident Economic Index rose 0.3% in December to 103.3, while the Lagging Economic Index increased 0.1% to 107.6, data from the Conference Board showed.
Source: Dow Jones