19 December 2002
U.S. Leading Index Recovers in November
New York City - The Conference Board announced today that the U.S. leading index increased by 0.7 percent, the coincident index increased by 0.1 percent, and the lagging index decreased 0.2 percent in November.
- This month’s gain in the leading index is the largest since December of last year. With this increase, the index has now recovered its losses since May 2002, and is nearly 3.6 percent above its most recent trough in March 2001.
- Strength in the financial sector - coupled with a rebound in consumer expectations and a decline in unemployment insurance claims - contributed to the increase in the leading index this month.
- The coincident index, a measure of current economic activity, increased modestly in November. Despite this increase, the coincident index remains essentially flat since July 2002, reflecting a sluggish recovery from the last recession.
Leading Indicators. Five of the ten indicators that make up the leading index increased in November. The positive contributors to the index - beginning with the largest positive contributor - were stock prices, real money supply*, interest rate spread, average weekly initial claims for unemployment insurance (inverted), and index of consumer expectations. The four negative contributors - from the largest negative contributor to the smallest – were vendor performance, building permits, manufacturers’ new orders for nondefense capital goods*, and manufacturers’ new orders for consumer goods and materials*. Average weekly manufacturing hours held steady in November.
The leading index now stands at 112.3 (1996=100). Based on revised data, this index increased 0.1 percent in October and decreased 0.4 percent in September. During the six-month span through November, the leading index held steady, with four of the ten components advancing (diffusion index, six-month span equals 40 percent).
Coincident Indicators. Three of the four indicators that make up the coincident index increased in November. The positive contributors to the index - beginning with the largest positive contributor - were personal income less transfer payments*, manufacturing and trade sales*, and industrial production. Employees on nonagricultural payrolls decreased in November.
The coincident index now stands at 115.0 (1996=100). Based on revised data, this index held steady in October and decreased 0.1 percent in September. During the six-month period through November, the coincident index increased 0.4 percent.
Lagging Indicators. The lagging index decreased 0.2 percent to 99.7 (1996=100) in November. Four of the seven components declined in November. The negative contributors to the index – beginning with the largest negative contributor – were average prime rate charged by banks, commercial and industrial loans outstanding*, average duration of unemployment, and change in CPI for services. The positive contributors to the index were change in labor cost per unit of output* and ratio of manufacturing and trade inventories to sales*. Ratio of consumer installment credit to personal income* held steady in November. Based on revised data, the lagging index held steady in October and decreased 0.5 percent in September.
Data Availability. The data series used by The Conference Board to compute the three composite indexes and reported in the tables in this release are those available “as of” 12 Noon on December 18, 2002. Some series are estimated as noted below.
NOTES: Series in the leading index that are based on The Conference Board estimates are manufacturers’ new orders for consumer goods and materials, manufacturers’ new orders for nondefense capital goods, and the personal consumption expenditure deflator for money supply. Series in the coincident index that are based on The Conference Board estimates are personal income less transfer payments and manufacturing and trade sales. Series in the lagging index that are based on The Conference Board estimates are inventories to sales ratio, consumer installment credit to income ratio, change in labor cost per unit of output, and the personal consumption expenditure deflator for commercial and industrial loans outstanding.
Return to Previous Page