LEI Suggests U.S. Economy Should Improve in Early 2012
January 26, 2012
Sign Up to receive Email Alerts for all the market-moving FLASH Headline Reports
Economic Update: US Leading Economic Index
The Conference Board reported that their Leading Economic Index rose +0.4% in December to a reading of 94.3, which was below the consensus for an increase of +0.7%.
The Conference Board’s Ataman Ozilidrim said, “Revised figures show that adding the new Leading Credit Index, in conjunction with other changes, makes the LEI a more accurate predictor of U.S. business cycles since 1990.” Ozyildirim added, “The improvement is especially pronounced before and during the 2008-2009 recession, and during the current expansion. In December, the LEI for the U.S. increased again. The gain was widespread among the leading indicators, suggesting economic conditions should improve in early 2012. However, the LEI gain in December was held back by negative contributions from the new Leading Credit Index — which indicates weak credit and financial conditions — and from consumer expectations for business and economic conditions.”
Ken Goldstein, an economist at The Conference Board, said, “The CEI and other recent data reflect an economy that ended 2011 on a positive note and the LEI provides some reason for cautious optimism in the first half of 2012. This somewhat positive outlook for a strengthening domestic economy would seem to be at odds with a global economy that is losing some steam. Looking ahead, the big question remains whether cooling conditions elsewhere will limit domestic growth or, conversely, growth in the U.S. will lend some economic support to the rest of the globe.”
The Conference Board Coincident Economic Index (CEI) for the U.S. rose by +0.3% in December to 103.4 (2004=100).
About the LEI: 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.
Introducing the Short-Term Market Manager
This new service is designed to help investors navigate the stock market's short-term trends (5-15 days). Check it out today!
Remember, you are in control your email alerts! You can receive alerts for more than 25 free research report alerts including: The “10.0” Report, The Insiders Report, ETF Leaders Report, and The Focus List.
