THE CONFERENCE BOARD NEWS LEADING ECONOMIC INDICATORS FOR WIRE TRANSMISSION: 8:30 A.M. ET, TUESDAY SEPTEMBER 3, 1996 COMPOSITE INDEX OF LEADING, COINCIDENT, AND LAGGING INDICATORS: JULY 1996 The composite index of leading indicators increased 0.2 percent in July to 103.1 (1987 equals 100), according to preliminary estimates prepared by The Conference Board. The leading index increased 0.5 percent in June and increased 0.2 percent in May. Over the six months from January to July, the index increased 2.7 percent. During the six-month period through July, all eleven leading economic indicators advanced (diffusion index, six-month span equals 100.0 percent). The Conference Board's calculations show that six of the eleven leading economic indicators rose in July. The most significant increases--in order from the largest positive contributor to the smallest--are change in sensitive materials prices, average weekly initial claims for state unemployment insurance, manufacturers' new orders of consumer goods and materials, and contracts and orders for plant and equipment. The most significant negative contributors to the composite leading index in July are average factory workweek, stock prices, and vendor performance (slower deliveries diffusion index). The composite index of coincident indicators increased 0.1 percent in July to 121.1 (1987 equals 100). Two components--employees on nonagricultural payrolls and industrial production--increased. Personal income less transfer payments decreased. Manufacturing and trade sales in July are not yet available. Based on revised data, the coincident index increased 0.3 percent in June and increased 0.5 percent in May. Over the six months from January to July, the index increased 2.0 percent. The composite index of lagging indicators increased 0.6 percent in July to 103.0 (1987 equals 100). Based on revised data, the lagging index held steady in June and increased 0.2 percent in May. NOTICE:. The next release of the leading index is scheduled for Tuesday, October 1, at 8:30 A.M. * * * ------------------------------------------------------------------------ ABOUT THE CONFERENCE BOARD-- The Conference Board is a worldwide research and business membership group, with more than 2,700 corporate and other members in 60 nations. One of the leading private sources of economic and business intelligence, The Conference Board is a not-for-profit, non-advocacy organization. In December 1995, the Conference Board assumed responsibility for computing the composite indexes from the U.S. Department of Commerce, which is in keeping with its mission to improve the business enterprise system and to enhance the contribution of business to society. The Conference Board is publishing a new monthly report, Business Cycle Indicators, that is patterned after a similarly titled, discontinued section of the Survey of Current Business. It contains the composite indexes, their components, and related economic series. Call (212) 339-0345 to subscribe or find out about other Conference Board products that are related to Business Cycle Indicators. Contacts at The Conference Board BCI Project: Media Contacts: Michael Boldin: (212) 339-0338 Randy Poe: (212) 339-0234 Recorded Message: (212) 339-0330 Frank Tortorici (212) 339-0231 Email: lei@conference-board.org Customer Service: (212) 339-0345 ------------------------------------------------------------------------ Summary Table--Composite Indexes 1996 May Jun Jul .............................................................. Composite Index Levels and percent change from preceding month .............................................................. Leading index Percent Change 102.4 102.9 103.1p .2 .5 .2p Coincident Index Percent Change 120.6r 121.0r 121.1p .5r .3r .1p Lagging Index Percent Change 102.4 102.4r 103.0p .2 .0r .6p n.a. Not available p Preliminary r Revised Indexes equal 100 in 1987 Source: The Conference Board Table 1. --Composite Indexes of Leading, Coincident, and Lagging Indicators Year Jan. Feb. Mar. Apr. May June July Aug. Sept Oct. Nov. Dec. IQ IIQ IIIQ IVQ Leading index (1987=100) 1987 99.0 99.3 99.4 99.5 99.7 100.2 100.9 101.0 101.0 100.6 99.8 99.6 99.2 99.8 101.0 100.0 1988 99.4 100.0 100.0 100.0 99.9 100.6 100.0 100.2 100.1 100.1 100.0 100.5 99.8 100.2 100.1 100.2 1989 100.9 100.7 100.2 100.4 99.6 99.4 99.2 99.2 99.2 98.9 99.1 99.4 100.6 99.8 99.2 99.1 1990 99.5 98.9 99.5 99.3 99.5 99.4 99.1 98.4 97.9 97.2 96.5 96.4 99.3 99.4 98.5 96.7 1991 96.0 96.5 96.8 96.9 97.1 97.1 98.0 97.8 97.7 97.7 97.5 97.2 96.4 97.0 97.8 97.5 1992 97.5 97.9 98.2 98.2 98.4 98.3 98.3 98.0 98.0 98.1 98.3 99.2 97.9 98.3 98.1 98.5 1993 99.0 99.2 98.6 98.6 98.2 98.4 98.2 98.6 98.7 99.3 99.7 100.3 98.9 98.4 98.5 99.8 1994 100.6 100.6 101.4 101.3 101.5 101.9 101.8 102.4 102.5 102.3 102.4 102.6 100.9 101.6 102.2 102.4 1995 102.6 102.4 101.9 101.3 101.1 101.3 101.1 101.2 101.1 100.7 100.6 100.9 102.3 101.2 101.1 100.7 1996 100.4 101.6 101.9 102.2 102.4 102.9 103.1p 101.3 102.5 Leading index--percent change from preceding month (quarter) 1987 -.2 .3 .1 .1 .2 .5 .7 .1 .0 -.4 -.8 -.2 .6 .6 1.2 -1.0 1988 -.2 .6 .0 .0 -.1 .7 -.6 .2 -.1 .0 -.1 .5 -.2 .4 -.1 .1 1989 .4 -.2 -.5 .2 -.8 -.2 -.2 .0 .0 -.3 .2 .3 .4 -.8 -.6 -.1 1990 .1 -.6 .6 -.2 .2 -.1 -.3 -.7 -.5 -.7 -.7 -.1 .2 .1 -.9 -1.8 1991 -.4 .5 .3 .1 .2 .0 .9 -.2 -.1 .0 -.2 -.3 -.3 .6 .8 -.3 1992 .3 .4 .3 .0 .2 -.1 .0 -.3 .0 .1 .2 .9 .4 .4 -.2 .4 1993 -.2 .2 -.6 .0 -.4 .2 -.2 .4 .1 .6 .4 .6 .4 -.5 .1 1.3 1994 .3 .0 .8 -.1 .2 .4 -.1 .6 .1 -.2 .1 .2 1.1 .7 .6 .2 1995 .0 -.2 -.5 -.6 -.2 .2 -.2 .1 -.1 -.4 -.1 .3 -.1 -1.1 -.1 -.4 1996 -.5 1.2 .3 .3 .2 .5 .2p .6 1.2 Coincident index (1987=100) 1987 98.1 99.0 99.1 99.3 99.5 99.7 100.1 100.3 100.5 101.3 101.2 102.0 98.7 99.5 100.3 101.5 1988 101.8 102.3 102.7 102.9 103.0 103.4 103.5 103.7 103.8 104.5 104.6 105.3 102.3 103.1 103.7 104.8 1989 105.6 105.6 105.8 106.0 105.7 105.6 105.4 105.8 105.6 105.6 106.1 106.3 105.7 105.8 105.6 106.0 1990 106.2 106.8 107.2 107.0 107.2 107.3 107.1 107.0 106.7 106.3 105.9 105.9 106.7 107.2 106.9 106.0 1991 105.1 104.9 104.8 105.0 105.2 105.4 105.4 105.4 105.6 105.6 105.5 105.5 104.9 105.2 105.5 105.5 1992 105.4 105.9 106.1 106.3 106.4 106.5 106.8 106.8 107.1 107.6 107.9 110.0 105.8 106.4 106.9 108.5 1993 108.1 108.4 108.5 109.1 109.3 109.4 109.4 110.1 110.3 110.6 111.2 111.8 108.3 109.3 109.9 111.2 1994 111.6 112.5 113.1 113.3 113.7 114.0 114.0 114.8 115.0 115.7 116.1 116.8 112.4 113.7 114.6 116.2 1995 117.0 117.3 117.4 117.1 117.0 117.5 117.4 118.0 118.3 118.3 118.6 119.1 117.2 117.2 117.9 118.7 1996 118.7 119.6 119.6 120.0 120.6r 121.0r 121.1p 119.3 120.5 Coincident index--percent change from preceding month (quarter) 1987 -.4 .9 .1 .2 .2 .2 .4 .2 .2 .8 -.1 .8 .7 .8 .8 1.2 1988 -.2 .5 .4 .2 .1 .4 .1 .2 .1 .7 .1 .7 .8 .8 .6 1.1 1989 .3 .0 .2 .2 -.3 -.1 -.2 .4 -.2 .0 .5 .2 .9 .1 -.2 .4 1990 -.1 .6 .4 -.2 .2 .1 -.2 -.1 -.3 -.4 -.4 .0 .7 .5 -.3 -.8 1991 -.8 -.2 -.1 .2 .2 .2 .0 .0 .2 .0 -.1 .0 -1.0 .3 .3 .0 1992 -.1 .5 .2 .2 .1 .1 .3 .0 .3 .5 .3 1.9 .3 .6 .5 1.5 1993 -1.7 .3 .1 .6 .2 .1 .0 .6 .2 .3 .5 .5 -.2 .9 .5 1.2 1994 -.2 .8 .5 .2 .4 .3 .0 .7 .2 .6 .3 .6 1.1 1.2 .8 1.4 1995 .2 .3 .1 -.3 -.1 .4 -.1 .5 .3 .0 .3 0.4 .9 .0 .6 0.7 1996 -.3 .8 .0 .3 .5r .3r .1p .5 1.0 Lagging Index (1987=100) 1987 100.1 99.4 99.3 99.5 99.5 99.6 99.7 99.9 100.6 100.8 100.9 100.7 99.6 99.5 100.1 100.8 1988 101.2 101.2 101.5 101.8 101.8 102.2 102.3 102.4 102.4 102.6 103.0 102.8 101.3 101.9 102.4 102.8 1989 102.9 103.5 103.9 103.6 104.3 104.8 105.2 105.3 105.3 105.5 105.5 105.4 103.4 104.2 105.3 105.5 1990 104.6 104.5 104.5 104.9 104.9 104.8 105.2 104.9 105.0 104.8 104.6 104.5 104.5 104.9 105.0 104.6 1991 104.6 104.2 104.0 103.2 102.6 101.9 101.6 101.1 100.8 100.6 100.2 99.9 104.3 102.6 101.2 100.2 1992 99.0 98.4 98.0 97.7 97.4 97.1 96.7 96.9 96.5 96.4 96.6 95.3 98.5 97.4 96.7 96.1 1993 96.3 96.4 96.1 96.2 96.3 96.4 96.8 96.5 96.6 96.5 96.2 96.3 96.3 96.3 96.6 96.3 1994 96.5 96.1 95.9 96.3 96.7 97.2 97.4 97.5 98.1 98.4 99.0 99.1 96.2 96.7 97.7 98.8 1995 99.7 100.4 100.8 101.4 101.8 102.3 102.3 102.3 102.3 102.5 102.4 102.3 100.3 101.8 102.3 102.4 1996 102.5 102.0 102.1r 102.2 102.4 102.4r 103.0p 102.2 102.3 Lagging index--percent change from preceding month (quarter) 1987 .7 -.7 -.1 .2 .0 .1 .1 .2 .7 .2 .1 -.2 -.2 -.1 .6 .7 1988 .5 .0 .3 .3 .0 .4 .1 .1 .0 .2 .4 -.2 .5 .6 .5 .4 1989 .1 .6 .4 -.3 .7 .5 .4 .1 .0 .2 .0 -.1 .6 .8 1.1 .2 1990 -.8 -.1 .0 .4 .0 -.1 .4 -.3 .1 -.2 -.2 -.1 -.9 .4 .1 -.4 1991 .1 -.4 -.2 -.8 -.6 -.7 -.3 -.5 -.3 -.2 -.4 -.3 -.3 -1.6 -1.4 -1.0 1992 -.9 -.6 -.4 -.3 -.3 -.3 -.4 .2 -.4 -.1 .2 -1.3 -1.7 -1.1 -.7 -.6 1993 1.0 .1 -.3 .1 .1 .1 .4 -.3 .1 -.1 -.3 .1 .2 .0 .3 -.3 1994 .2 -.4 -.2 .4 .4 .5 .2 .1 .6 .3 .6 .1 -.1 .5 1.0 1.1 1995 .6 .7 .4 .6 .4 .5 .0 .0 .0 .2 -.1 -0.1 1.5 1.5 .5 0.1 1996 .2 -.5 .1r .1r .2 .0r .6p -.2 .1 n.a. Not available p Preliminary. r Revised. NOTE.--Quarterly data are averages of monthly figures. Quarterly percent changes are computed from quarterly data. See tables 2 and 3 for the composition of the indexes. Table 2.--Data and Net Contributions for Components of the Leading Index 1996 Component Jan. Feb. Mar. Apr. May June July Leading index component data Average workweek, production workers, mfg. (hours)................ 40.0 41.4 41.4 41.5 41.7 41.9r 41.6p Average weekly initial claims, state unemployment insurance (thousands)*.. 362 365 377 357 349 351 326 Mfrs.' new orders, consumer goods and materials industries (bil. 1987 dol.) 121.15 121.11 118.74r 124.90 126.50 126.69r 129.28p Vendor performance--slower deliveries diffusion index (percent)............ 46.9 50.1 49.9 49.2 50.0 53.2 50.9 Contracts and orders for plant and equipment (bil. 1987 dol.)........... 53.23r 53.83 55.76r 52.12r 54.89r 54.02r 56.91p Building permits (index: 1987=100)..... 87.0 89.4 89.8 92.1 91.6 89.3 92.0 Change in mfrs.' unfilled orders, durable goods industries (bil. 1987 dol.)#... 2.05 2.64 3.28 3.26 3.20r 2.99r 2.86p Change in sensitive materials prices (percent)#........................... -1.77 -1.57 -1.45r -1.30r -1.11r -.66r -.32 Stock prices, 500 common stocks (c) (index: 1941-43=10).................. 614.42 649.54 647.07 647.17 661.23 668.50 644.07 Money supply M2 (bil. 1987 dol.)....... 2703.0r 2709.9r 2725.8r 2719.7r 2706.8r 2717.3r 2714.9p Index of consumer expectations (c) (1966:1=100)......................... 78.7 77.8 86.2 83.0 79.2 84.0 86.5 LEADING INDEX (1987=100)............... 100.4 101.6 101.9 102.2 102.4 102.9 103.1p Percent change from preceding month.. -.5 1.2 .3 .3 .2 .5 .2p Leading index net contributions Average workweek, production workers, mfg......................... .... .63 .00 .04 .09 .09r -.13p Average weekly initial claims, state unemployment insurance............... .... -.01 -.06 .10 .04 -.01 .13 Mfrs.' new orders, consumer goods and materials industries................. .... .00 -.08 .20 .05 .01r .08p Vendor performance--slower deliveries diffusion index...................... .... .12 -.01 -.02 .03 .11 -.08 Contracts and orders for plant and equipment............................ .... .02 .05 -.10 .07 -.02r .07p Building permits....................... .... .04 .01 .04 -.01 -.04 .04 Change in mfrs.' unfilled orders, durable goods industries..................... .... .11 .12 .00 -.01r -.04 -.02p Change in sensitive materials prices... .... .10 .06r .07r .09r .21r .16 Stock prices, 500 common stocks (c).... .... .15 -.01 .00 .06 .03 -.10 Money supply M2........................ .... .05 .11 -.04 -.09r .07r -.02p Index of consumer expectations (c)..... .... -.02 .16 -.06 -.07 .09 .04 p Preliminary. r Revised. * Inverted series; a negative change in this component makes a positive contribution to the index. # Changes are smoothed by an autoregressive-moving-average filter developed by Statistics Canada. (c) Copyrighted. Series from private sources are provided through the courtesy of the compilers and are subject to their copyrights: Stock prices, Standard & Poor's Corporation; consumer expectations, University of Michigan's Survey Research Center. NOTE.--The percent change in the index equals (except for rounding differences) the sum of the net contributions of the individual components. Table 3.--Data and Net Contributions for Components of the Coincident and Lagging Indexes 1996 Component Jan. Feb. Mar. Apr. May June July Coincident index component data Employees on nonagricultural payrolls (thousands).......................... 118070 118579 118737 118928 119335r 119555r 119748p Personal income less transfer payments (ann. rate, bil. chain 1992 dol.).... 4799.9 4827.8 4831.4 4839.1 4858.2r 4904.8r 4894.6p Industrial production (index: 1987=100) 122.5 124.2 123.6 124.5 125.2r 126.0r 126.2p Manufacturing and trade sales (mil. chain 1992 dol.)............... 664348 673446 673005 678787r 683501r 681182p n.a. COINCIDENT INDEX (1987=100)............ 118.7 119.6 119.6 120.0 120.6r 121.0r 121.1p Percent change from preceding month.. -.3 .8 .0 .3 .5r .3r .1p Coincident index net contributions Employees on nonagricultural payrolls.. .... .19 .06 .07 .15r .08r .08p Personal income less transfer payments. .... .16 .02 .04 .11r .26r -.07p Industrial production.................. .... .21 -.08 .11 .09r .10r .03p Manufacturing and trade sales.......... .... .18 -.01 .12 .09 -.05p n.a. Lagging index component data Average duration of unemployment (weeks)*............................. 16.0 16.6 17.3 17.4 16.8 17.6 16.8 Ratio, manufacturing and trade inventories to sales (chain 1992 dol.)........... 1.39 1.38 1.37 1.36 1.35 1.36p n.a. Change in index of labor cost per unit of output, mfg. (ann. rate, percent)# -1.1r -2.8r -2.2r -.3r 1.3r 1.8r 1.7p Average prime rate charged by banks (percent)............................ 8.50 8.25 8.25 8.25 8.25 8.25 8.25 Commercial and industrial loans outstanding (mil. 1987 dol.)......... 441381 438393 444309 443973r 442972r 443278 448198p Ratio, consumer installment credit out- standing to personal income (percent) 17.74r 17.79r 17.87r 17.89r 17.88r 17.86p n.a. Change in CPI for services (ann. rate, percent)#................ 2.7 2.9 2.9 3.0 3.2 3.3 3.7 LAGGING INDEX (1987=100)............... 102.5 102.0 102.1r 102.2 102.4 102.4r 103.0p Percent change from preceding month.. .2 -.5 .1p .1r .2 .0r .6p Lagging index net contributions Average duration of unemployment....... .... -.15 -.17 -.02 .14 -.19r .30 Ratio, manufacturing and trade inventories to sales............................. .... -.09 -.09 -.09 -.09 .09p n.a. Change in index of labor cost per unit of output, mfg....................... .... -.17r .06 .19r .16r .05r -.02p Average prime rate charged by banks.... .... -.10 .00 .00 .00 .00 .00 Commercial and industrial loans outstanding.......................... .... -.08 .15 -.01 -.03r .01 .20p Ratio, consumer installment credit out- standing to personal income.......... .... .06r .09 .02 -.01 -.02p n.a. Change in CPI for services............. .... .05 .00 .02 .05 .02r .16 CPI Consumer Price Index. n.a. Not available. p Preliminary. r Revised. * Inverted series; a negative change in this component makes a positive contribution to the index. # Changes are smoothed by an autoregressive-moving-average filter developed by Statistics Canada. NOTE.--The percent change in the index equals (except for rounding differences) the sum of the net contributions of the individual components. Table 4.--Diffusion Indexes - Proportion of Component Series Rising 1996 Jan. Feb. Mar. Apr. May June July Percent rising from previous month Leading index 36.4 77.3 59.1 50.0 63.6 63.6 54.5 Coincindent index 0.0 100.0 50.0 100.0 100.0 75.0 66.7 Lagging index 57.1 28.6 57.1 50.0 50.0 64.3 70.0 July 95 Aug. 95 Sept. 95 Oct. 95 Nov. 95 Dec. 95 Jan. to to Jan. to Feb. to Mar. to Apr. to May to June July Percent rising over 6-month span Leading index 63.6 54.5 54.5 86.4 81.8 81.8 100.0 Coincindent index 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Lagging index 42.9 28.6 28.6 42.9 57.1 57.1 60.0 The diffusion indexes measure the proportion of the components that are rising. Components that rise more than 0.05 percent are given a value of 1.0, components that change less than 0.05 percent are given a value of 0.5, and components that fall more than 0.05 percent are given a value of 0.0. THIS IS NEWS FROM THE CONFERENCE BOARD.