Economic growth appears to be on course to continue for the rest of the year.
The Conference Board reports its Leading Economic Index (LEI), seen by many analysts as a fairly reliable indicator of economic activity, rose 0.4 percent in August.
The increase follows advances of 0.3 percent in July and 0.6 percent in June.
“The August gain is consistent with continuing growth in the U.S. economy for the second half of the year, which may even see a moderate pick up,” said Conference Board Director of Business Cycles and Growth Research Ataman. “While the economic impact of recent hurricanes is not fully reflected in the leading indicators yet, the underlying trends suggest that the current solid pace of growth should continue in the near term.”
The LEI is a composite average of several individual leading indicators constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component. It smooths out some of the volatility of individual components.
The ten LEI components include:
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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