A Thursday economic report from The Conference Board was its index of leading indicators for the month of February. We always warn readers that leading indicators may not be as leading as investors would think based on the name of the report. The data are a month old, and much of the subindex data is already known when the report is issued.

After gaining 0.1% in January, February’s leading indicators rose by 0.5%. That being said, the February reading was at 99.8, versus the 2004 benchmark of 100.0.

What Thursday’s report signals is that the weather-induced slowdown in January and December may be reversed rapidly. The gains in housing permits and the interest rate spread appear to have easily overcome weak readings in the manufacturing workweek, consumer expectations and rising initial jobless claims.

The Coincident Economic Index rose by 0.2% in February to 108.2, versus a 0.1% gain in January and no change in December. The Lagging Economic Index rose by 0.3% in February to 122.1, versus a 0.5% gain in January and a 0.4% gain in December.

Again, much of this data is known ahead of time as there are 10 components that make up The Conference Board Leading Economic Index. These are as follows:

• Average weekly hours, manufacturing
• Average weekly initial claims for unemployment insurance
• Manufacturers’ new orders, consumer goods and materials
• ISM Index of New Orders
• Manufacturers’ new orders, nondefense capital goods excluding aircraft orders
• Building permits, new private housing units
• Stock prices, 500 common stocks
• Leading Credit Index
• Interest rate spread, 10-year Treasury bonds less federal funds
• Average consumer expectations for business conditions

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