The latest Conference Board Leading Economic Index (LEI) for October increased fractionally to 112.1 from 112.0 in September. The Coincident Economic Index (CEI) came in at 104.7, up from 104.5 the previous month.

The Conference Board LEI for the U.S. increased in October, primarily due to improving consumer expectations for business conditions, the yield spread and the Leading Credit Index™, which helped offset large declines in stock prices and average weekly claims. In the six-month period ending October 2018, the leading economic index increased 2.6 percent (about a 5.2 percent annual rate), slower than the growth of 3.2 percent (about a 6.5 percent annual rate) over the previous six months. However, the strengths among the leading indicators remain widespread.

The Conference Board CEI for the U.S., a measure of current economic activity, increased in October. The coincident economic index rose 1.1 percent (about a 2.1 percent annual rate) between April and October 2018, slightly slower that its growth of 1.2 percent (about a 2.4 percent annual rate) over the previous six months. The strengths among the coincident indicators have remained very widespread, with all components continuing to advance over the past six months. The lagging economic index continued to increase, but at a higher rate than the CEI. As a result, the coincident-to-lagging ratio declined. Meanwhile real GDP expanded at a 3.5 percent annual rate in the third quarter, after increasing 4.2 percent (annual rate) in the second quarter. [Full notes in PDF]

Here is a log-scale chart of the LEI series with documented recessions as identified by the NBER. The use of a log scale gives us a better sense of the relative sizes of peaks and troughs than a more conventional linear scale.

For additional perspective on this indicator, see the latest press release, which includes this overview:

“The US LEI increased slightly in October, and the pace of improvement slowed for the first time since May,” said Ataman Ozyildirim, Director of Economic Research and Global Research Chair at The Conference Board. “The index still points to robust economic growth in early 2019, but the rapid pace of growth may already have peaked. While near term economic growth should remain strong, longer term growth is likely to moderate to about 2.5 percent by mid to late 2019.”