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A key forecasting gauge of economic activity has good news for a second consecutive month.

The Conference Board reports its Leading Economic Index (LEI) rose 0.4% in July to 124.3, following an increase of 0.3% the month before.

Last month's advance by the LEI, said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board, suggests “moderate economic growth should continue through the end of 2016. There may even be some moderate upside growth potential if recent improvements in manufacturing and construction are sustained, and average consumer expectations don’t deteriorate further.”

The LEI is 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:

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

Another week of declines in first-time applications for state unemployment benefits.

The Department of Labor (DOL) reports initial claims were down by 4,000 in the week ending August 13, to a seasonally adjusted 262,000. That marks 76 consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The four-week moving average, which many economists consider a more accurate barometer of the labor market, totaled 265,250 -- an increase of 2,500 from the previous week's unrevised average.

The complete report is available on the DOL website.

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