Leading Economic Index Points to Ongoing Growth
From the Conference Board today:
The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.5 percent in November to 118.0, following a 0.9 percent increase in October, and a 0.1 percent increase in September (see chart above).
Says Ataman Ozyildirim, economist at The Conference Board: “November’s increase in the LEI for the U.S. was widespread among the leading indicators and continues to suggest that the risk of an economic downturn in the near term has receded. Interest rate spread and housing permits made the largest contributions to the LEI this month, overcoming a falling average workweek in manufacturing, which reversed its October gain. The CEI also rose on improving employment and personal income although industrial production fell in November.”
Says Ken Goldstein, economist at The Conference Board: “The LEI is pointing to continued growth this winter, possibly even gaining momentum by spring. For the second month in a row, building permits made a relatively strong contribution and there is a chance that the long decline in housing is finally slowing. However, this somewhat positive outlook for the domestic economy is at odds with a global economy that appears to be losing steam. In particular, a deeper-than-expected recession in Europe could easily derail the outlook for the U.S. economy.”
MP: The LEI has now increased in 31 out of the last 32 months going back to April 2009 as the recession was ending, and suggests that the economic expansion will continue through next year, with almost no chance of any kind of pending double-dip recession. The rebound in the building permits component of the LEI lends support to the idea that the turning point in construction has finally arrived and will start making a larger contribution to the economic recovery moving forward.