Leading Economic Indicators: Better or Less-Bad Economy

The Conference Board has released its Leading Economic Index for November showing a 0.5% rise 118.0.  This was above a 0.3% consensus reading and the ‘leading’ bias to this reports suggests the expectation of or the belief of better times ahead.

Before you weigh too much on the ‘leading’ aspect, keep in mind that about 70% of the data used to compile ‘leading indicators’ has already been seen.  It is also not exactly a report based upon fresh data today. The latest 0.5% gain is following a 0.9% gain in October and a 0.1% gain in September.

The report noted, “November’s increase in the LEI for the U.S. was widespread among the leading indicators and continues to suggest that the risk of an economic downturn in the near term has receded.”

Cited as positives were credited by interest rate spread and housing permits, and even overcoming a falling average workweek in manufacturing.  Id did warn that global headwinds could slow things ahead: “In particular, a deeper-than-expected recession in Europe could easily derail the outlook for the U.S. economy.”

The Conference Board’s Coincident Economic Index rose 0.1% in November to 103.7 and the Lagging Economic Index rose by 0.1% in November to 110.9.

JON C. OGG