RTTNews - Research group the Conference Board released its report on leading economic indicators in the month of July on Thursday, showing that its leading indicators index increased for the fourth consecutive month.
The report showed that the leading economic index rose 0.6 percent in July following an upwardly revised 0.8 percent increase in June. Economists had expected the index to increase by 0.7 percent, matching the increase originally reported for the previous month.
Positive contributions from six of the ten indicators that make up the leading index contributed to the continued growth.
The interest rate spread, weekly jobless claims, weekly manufacturing hours, supplier deliveries, stock prices and manufacturers' new orders for non-defense capital goods contributed positively to the index.
Meanwhile, the negative contributors were the index of consumer expectations, real money supply, and building permits. Manufacturers' new orders for consumer goods and materials held steady in July.
Chris Low, chief economist for FTN Financial, said, The LEI is a composite of 10 things we already know - jobless claims, consumer orders, money supply, interest rate spreads, etc - which is nonetheless a useful reminder of how the totality of leading indicators add up.
Right now, they add up as strong as they did at the end of the 2001 recession, Low added.
The Conference Board also said that its coincident economic index was unchanged in July after falling by 0.4 percent in each of the two previous months.
Positive contributions from industrial production, personal income, and manufacturing and trade sales were offset by a negative contribution from employees on non-farm payrolls.
At the same time, the report showed that the lagging economic index fell by 0.3 percent in July following a 0.7 percent decrease in June.
The ratio of consumer installment credit to personal income was the only positive contributor to the index, while commercial and industrial loans outstanding and average duration of unemployment were among the negative contributors.
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