U.S. Leading Index posts small increase after 5 months of decline

The Conference Board announced that the U.S. Leading Index increased by 0.1%. The Leading Index had declined for five consecutive months. There are 10 indicators that make up the leading index. M2, the index of supplier deliveries (vendor performance), and the interest rate spread had large positive contributions that offset the large negative contributions from initial unemployment claims, building permits, and stock prices. Average weekly manufacturing hours and manufacturers’ new orders for consumer goods and materials had small gains. Manufacturers’ new orders for nondefense capital goods was unchanged and the index of consumer expectations had a small decline. Here are five of the charts going back to 1998.







M2 and the interest spread indicators are making positive contributions to the leading index. However, looking back to 1960 both of these indicators often bottom at the beginning of a recession and peak after the recession has ended (making positive contributions through the recession). These two indicators are acting like we are in a recession (even though they are giving large positive contributions to the leading index).

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