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The Press Release in a PDF file

The Conference Board announced today that the U.S. leading index held steady, the coincident index increased 0.3 percent and the lagging index also held steady in February.

  • The leading index was unchanged in February, but there were also upward revisions to previous months. As a result, the leading index is increasing at a 3.0 to 4.0 percent annual rate, and this growth continues to be widespread.
  • The coincident index increased again in February, and has now grown at about a 2.0 percent annual rate from its most recent low in April 2003. The growth in the coincident index also has been widespread over the last six months (production, sales, income, and employment).
  • The upturn in the leading index since March 2003 has been signaling stronger economic growth, and real GDP growth picked up to a 6.1 percent annual rate during the second half of 2003. While the growth rate of the leading index has slowed somewhat in recent months, it is still signaling relatively strong economic growth in the near term.

LEADING INDICATORS. Six of the ten indicators that make up the leading index increased in February. The positive contributors - beginning with the largest positive contributor - were real money supply*, vendor performance, average weekly manufacturing hours, stock prices, manufacturers' new orders for consumer goods and materials*, and manufacturers' new orders for nondefense capital goods*. The negative contributors - beginning with the largest negative contributor - were index of consumer expectations, average weekly initial claims for unemployment insurance (inverted), building permits, and interest rate spread.

The leading index now stands at 115.1 (1996=100). Based on revised data, this index increased 0.4 percent in January and increased 0.4 percent in December. During the six-month span through February, the leading index increased 1.7 percent, with eight out of ten components advancing (diffusion index, six-month span equals 80 percent).

COINCIDENT INDICATORS. All four indicators that make up the coincident index increased in February. The positive contributors to the index - beginning with the largest positive contributor - were industrial production, personal income less transfer payments*, manufacturing and trade sales*, and employees on nonagricultural payrolls.

The coincident index now stands at 116.1 (1996=100). This index increased 0.1 percent in January and increased 0.1 percent in December. During the six-month period through February, the coincident index increased 1.2 percent.

The next release is scheduled for April 19, Monday at 10 A.M. ET.

LAGGING INDICATORS. The lagging index stands at 98.2 (1996=100) in February, with four of the seven components advancing. The positive contributors to the index - beginning with the largest positive contributor - were commercial and industrial loans outstanding*, ratio of consumer installment credit to personal income*, change in labor cost per unit of output*, and change in CPI for services. The negative contributor was average duration of unemployment (inverted). The average prime rate charged by banks and the ratio of manufacturing and trade inventories to sales* held steady in February. Based on revised data, the lagging index increased 0.1 percent in January and decreased 0.4 percent in December.


The data series used by The Conference Board to compute the three composite indexes and reported in the tables in this release are those available "as of" 12 Noon on March 17, 2004. Some series are estimated as noted below.

* Series in the leading index that are based on The Conference Board estimates are manufacturers' new orders for consumer goods and materials, manufacturers' new orders for nondefense capital goods, and the personal consumption expenditure deflator for money supply. Series in the coincident index that are based on The Conference Board estimates are personal income less transfer payments and manufacturing and trade sales. Series in the lagging index that are based on The Conference Board estimates are inventories to sales ratio, consumer installment credit to income ratio, change in CPI for services and the personal consumption expenditure deflator for commercial and industrial loans outstanding.

The procedure used to estimate the current month's personal consumption expenditure deflator (used in the calculation of real money supply and commercial and industrial loans outstanding) now incorporates the current month's consumer price index when it is available before the release of the U.S. Leading Economic Indicators.

Effective with the September 18, 2003 release, the method for calculating manufacturers' new orders for consumer goods and materials (A0M008) and manufacturers' new orders for nondefense capital goods (A0M027) has been revised. Both series are now constructed by deflating nominal aggregate new orders data instead of aggregating deflated industry level new orders data. Both the new and the old methods utilize appropriate producer price indices. This simplification remedies several issues raised by the recent conversion of industry data to the North American Classification System (NAICS), as well as several other issues, e.g. the treatment of semiconductor orders. While this simplification caused a slight shift in the levels of both new orders series, the growth rates were essentially the same. As a result, this simplification had no significant effect on the leading index.

Effective with the January 22, 2004 release a programming error in the calculation of the leading index -- in place since January 2002 -- has been corrected. The cyclical behavior of the leading index was not affected by either the calculation error or its correction, but the level of the index in the 1959-1996 period is slightly higher.

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Professional Contacts at The Conference Board:
Ken Goldstein: 212-339-0331
Indicators Program: 212-339-0336

Media Contacts:
Randy Poe: 212-339-0234
Frank Tortorici: 212-339-0231



THE CYCLICAL INDICATOR APPROACH. The composite indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The leading, coincident, and lagging indexes are essentially composite averages of between four and ten individual leading, coincident, or lagging indicators. (See page 3 for details.) 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.

Historically, the cyclical turning points in the leading index have occurred before those in aggregate economic activity, while the cyclical turning points in the coincident index have occurred at about the same time as those in aggregate economic activity. The cyclical turning points in the lagging index generally have occurred after those in aggregate economic activity.

U.S. Composite Indexes: Components and Standardization Factors

Leading Index


Average weekly hours, manufacturing



Average weekly initial claims for unemployment insurance



Manufacturers' new orders, consumer goods and materials



Vendor performance, slower deliveries diffusion index



Manufacturers' new orders, nondefense capital goods



Building permits, new private housing units



Stock prices, 500 common stocks



Money supply, M2



Interest rate spread, 10-year Treasury bonds less federal funds



Index of consumer expectations


Coincident Index  


Employees on nonagricultural payrolls



Personal income less transfer payments



Industrial production



Manufacturing and trade sales


Lagging Index  


Average duration of unemployment



Inventories to sales ratio, manufacturing and trade



Labor cost per unit of output, manufacturing



Average prime rate



Commercial and industrial loans



Consumer installment credit to personal income ratio



Consumer price index for services



Notes: The component factors are inversely related to the standard deviation of the month-to-month changes in each component. They are used to equalize the volatility of the contribution from each component and are "normalized" to sum to 1. When one or more components are missing, the other factors are adjusted proportionately to ensure that the total continues to sum to 1.

These factors were revised effective on the release for January 2004, and all historical values for the three composite indexes were revised at this time to reflect the changes. (Under normal circumstances, updates to the leading, coincident, and lagging indexes only incorporate revisions to data over the past six months.) The factors for the leading index were calculated using 1984-2002 as the sample period for measuring volatility. A separate set of factors for the 1959-1983 period is available upon request. The primary sample period for the coincident and lagging indexes was 1959-2002. For additional information on the standardization factors and the index methodology see: "Benchmark Revisions in the Composite Indexes," Business Cycle Indicators December 1997 and "Technical Appendix: Calculating the Composite Indexes" Business Cycle Indicators December 1996, or the Web site:

To address the problem of lags in available data, those leading, coincident and lagging indicators that are not available at the time of publication are estimated using statistical imputation. An autoregressive model is used to estimate each unavailable component. The resulting indexes are therefore constructed using real and estimated data, and will be revised as the unavailable data during the time of publication become available. Such revisions are part of the monthly data revisions, now a regular part of the U.S. Business Cycle Indicators program. The main advantage of this procedure is to utilize in the leading index data such as stock prices, interest rate spread, and manufacturing hours that are available sooner than other data on real aspects of the economy such as manufacturers' new orders. Empirical research by The Conference Board suggests that there are real gains in adopting this procedure to make all the indicator series as up-to-date as possible.

U.S. Leading Economic Indicators news release schedule for 2004::
April 19, Monday………………………….……for March 2004 data
May 20, Thursday………………………………for April 2004 data
June 17, Thursday………………………………for May 2004 data
July 22, Thursday………………………….……for June 2004 data
August 19, Thursday……………………………for July 2004 data
September 23, Thursday………………………..for August 2004 data
October 21, Thursday…………………………..for September 2004 data
November 18, Thursday………………………..for October 2004 data
December 20, Monday…………………………for November 2004 data

All releases are at 10:00AM ET.

ABOUT THE CONFERENCE BOARD. The Conference Board is the premier business membership and research network founded in 1916. It has become a global leader in helping executives build strong professional relationships, expand their business knowledge and find solutions to a wide range of business challenges. Its Economics Program, under the direction of Chief Economist Gail Fosler, is a recognized source of forecasts, analysis and objective indicators such as Leading Economic Indicators and Consumer Confidence.

This role is part of a long tradition of research and education that stretches back to the compilation of the first continuous measure of the cost of living in the United States in 1919. In 1995, The Conference Board assumed responsibility for computing the composite indexes from the U.S. Department of Commerce. The Conference Board now produces business cycle indexes for the U.S., Australia, France, Germany, Korea, Japan, Mexico, Spain and the U.K. To subscribe to any of these indexes, please visit or contact the customer service department at 212-339-0345 or email


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