The leading index decreased by 0.1 percent, the coincident index increased by 0.5 percent, and the lagging index increased by 0.6 percent in April. Taken together, the three composite indexes and their components continue to show a strong economy:
- The indicators point to a continuation of the expansion during 2000, though at a slower pace than that of the last six months.
- The biggest risk to the ongoing expansion remains the interest-rate increases at hand, and the prospect of still more Federal Reserve action. The most immediate risk would be a sustained inverted yield curve.
LEADING INDICATORS. Five of the ten indicators that make up the leading index rose in April. The positive contributors to the index, from largest to smallest, were money supply (M2), average weekly manufacturing hours, vendor performance, stock prices, and consumer expectations. The largest negative contributors to the leading index in April were manufacturers’ new orders for consumer goods and materials and the interest rate spread.
The leading index now stands at 106.0 (1996=100). This index increased by 0.1 percent in March and decreased by 0.3 percent in February (the same values reported last month). During the six-month span through April, the leading index rose by 0.5 percent with six of the ten components advancing (diffusion index, six-month span equals 60 percent).
COINCIDENT INDICATORS. All three of the available components of the coincident index increased in April. The order from largest to smallest contributor was personal income less transfer payments, employees on nonagricultural payrolls, and industrial production. (Data on manufacturing and trade sales are not yet available.)
With the increase of 0.5 percent in April, the coincident index stands at 115.2 (1996=100). This index rose by 0.4 percent in March and held steady in February (the same values reported last month). During the six-month period through April, the coincident index increased by 2 percent with all three available components making positive contributions.
LAGGING INDICATORS. The lagging index rose by 0.6 percent to 104.6 (1996=100). Four of the five available components of the lagging index increased in April. The most significant contributors to the increase, from the largest to the smallest, were commercial and industrial loans outstanding, average duration of unemployment, change in labor costs per unit of output, and the average prime rate charged by banks. The change in CPI for services held steady in April. Based on revised data, the lagging index decreased slightly in March by 0.1 percent and increased by 0.6 percent in February.
The data series used to compute the three composite indexes and reported in the tables in this release are those available "as of" 12 Noon on May
30, 2000.
REVISIONS AND COMPOSITE INDEX METHODOLOGY. Under normal circumstances,
updates to the leading, coincident, and lagging indexes only incorporate revisions to
data over the past six months. Long-history revisions (covering
changes in the components that fall outside the moving, six-month
window) are usually scheduled for December of each year.
The schedule for the Leading Economic Indicators news release in 2000:
| May data ... |
Wednesday July 5, 2000 |
| June data ... |
Wednesday August 2, 2000 |
| July data ... |
Wednesday August 30, 2000 |
| August data ... |
Tuesday October 3, 2000 |
| September data ... |
Thursday November 2, 2000 |
| October data ... |
Monday December 4, 2000 |
| November data ... |
Wednesday December 27, 2000 |
All releases are at 10:00 A.M. ET
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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.
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