PhotoFollowing a slight (-0.2%) decline in May, The Conference Board's Leading Economic Index (LEI) rose 0.3% in June. The index was up 0.5% in April.

“Improvements in initial claims for unemployment insurance, building permits, and financial indicators were the primary drivers,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “While the LEI continues to point to moderating economic growth in the U.S. through the end of 2016, the expansion still appears resilient enough to weather volatility in financial markets and a moderating outlook in labor markets.”

The LEI is essentially a composite average of several individual leading indicators. It's 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 ten components of the LEI include:

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

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