US leading index comes in at 0.9% versus 0.7% estimate

Leading index for July 2021

• leading index 0.9% versus 0.7%
  
• June was revised to 0.5% from 0.7%. The index increased 1.2% in May
  
• The Coincident economic index increased 0.6% in July following a 0.4% increase in June in a 0.1% increase in May
  
• The lagging economic index rose by 0.6% versus unchanged in June. It increased 0.8% in May
  

"The U.S. LEI registered another large gain in July, with all components contributing positively," said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. "The Leading Index's overall upward trend, which started with the end of the pandemic-induced recession in April 2020, is consistent with strong economic growth in the second half of the year. While the Delta variant and/or rising inflation fears could create headwinds for the US economy in the near term, we expect real GDP growth for 2021 to reach 6.0 percent year-over-year, before easing to a still robust 4.0 percent growth rate for 2022."

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 leading index tends not to be a big market mover

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August 20, 2021 at 02:01AM
Greg Michalowski
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