The U.S. economy is forecast to continue showing moderate growth in the near term despite a decline in December. A report from the Conference Board says the Leading Economic Index for the U.S. fell 0.2 percent in December to 123.7, following 0.5-percent increases in November and October.
“The U.S. LEI fell slightly in December, led by a drop in housing permits and weak new orders in manufacturing,” says Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “However, the index continues to suggest moderate growth in the near-term despite the economy losing some momentum at the end of 2015. While the LEI’s growth rate has been on the decline, it’s too early to interpret this as a substantial rise in the risk of recession.”
The monthly indexes published by the Conference Board—a global, independent business membership and research association—are elements in an analytic system designed to signal peaks and troughs in the business cycle. The indexes are comprised of 10 components and 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.
The 10 components of The Conference Board Leading Economic Index for the U.S. include: average weekly hours for manufacturing; average weekly initial claims for unemployment insurance; manufacturers’ new orders for consumer goods and materials; the ISM Index of New Orders; manufacturers’ new orders for nondefense capital goods excluding aircraft orders; building permits for new private housing units; stock prices of 500 common stocks; the Leading Credit Index; interest rate spread of 10-year Treasury bonds less federal funds; and average consumer expectations for business conditions.
For more on The Conference Board’s index, click here.