The Conference Board's Leading Economic Index (LEI), seen by economists as a forecaster for the performance of the nation's economy, rose in July for the eleventh month in a row.
The LEI was up 0.3% in July to 128.3 following gains of 0.6% in June and 0.3% in May.
The improvement, according to Conference Board Director of Business Cycles and Growth Research Atman Ozymandias, suggests “the U.S. economy may experience further improvements in economic activity in the second half of the year.”
“The large negative contribution from housing permits, a reversal from June,” he noted, “was more than offset by gains in the financial indicators, new orders and sentiment.”
The LEI, a composite average of several individual leading indicators, is constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component -- primarily because it smooths out some of the volatility of individual components.
The Lei’s 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, non defense 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
The number of people filing applications for first-time state unemployment benefits was down sharply last week.
The Labor Department (DOL) reports initial jobless claims were down by 12,000 in the week ending August 12, to a seasonally adjusted 232,000.
What many economists consider a more accurate gauge of the labor market due to a lower level of volatility-- the 4-week moving average -- came in at 240,500, a drop of 500 from the previous week.
The complete report is available on the DOL website.