The Latest Conference Board Leading Economic Index (LEI) for November was released this morning. The index rose to 0.1 percent to 99.4 percent from the previous month's 99.3 (2004 = 100). Today's number was slightly below the 0.2 percent increase forecasted by Investing.com.
Here is an overview of today's release from the LEI technical notes:
The Conference Board LEI for the U.S. edged up in December. This month's gain was mostly driven by positive contributions from financial components. In the six-month period ending December 2013, the leading economic index increased 3.4 percent (about a 7.0 percent annual rate), much faster than the growth of 1.9 percent (about a 3.9 percent annual rate) during the previous six months. In addition, the strengths among the leading indicators have been more widespread than the weaknesses. [Full notes in PDF]
Here is a chart of the LEI series with documented recessions as identified by the NBER.
And here is a closer look at this indicator since 2000. We can more readily see that the recovery from the 2000 trough weakened in 2012 but began trending higher in the latter part of the year.
For a more details on the latest data, here is an excerpt from the press release:
"Despite month-to-month volatility in the final quarter of 2013, the U.S. LEI continues to point to gradually strengthening economic conditions through early 2014," said Ataman Ozyildirim, Economist at The Conference Board. "The LEI was lifted by its financial components in December, but consumer expectations for business conditions and residential construction continue to pose risks."
"This latest report suggests steady growth this spring, but some uncertainties remain," said Ken Goldstein, Economist at The Conference Board. "Business caution and concern about unresolved federal budget battles persist, but the better-than-expected holiday season might point to sustained stronger demand and could put the U.S on a faster growth track for 2014."
For a better understanding of the relationship between the LEI and recessions, the next chart shows the percentage off the previous peak for the index and the number of months between the previous peak and official recessions.
Here is a look at the rate of change, which gives a closer look at behavior of the index in relation to recessions.
And finally, here is the same snapshot, zoomed in to the data since 2000.
Check back next month for an updated analysis.
