The Conference Board Leading Economic Index (LEI) for the U.S slightly improved this month – and the authors say “ 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″.
Analyst Opinion of the Leading Economic Index
Because of the significant backward revisions, I do not trust this index.
This index is designed to forecast the economy six months in advance. The market (from Econoday) expected this index’s month-over-month change at -0.2 % to 0.2 % (consensus 0.1 %) versus the +0.1 % reported.
ECRI’s Weekly Leading Index (WLI) is forecasting no growth or a slight contraction over the next six months.
Additional comments from the economists at The Conference Board add context to the index’s behavior.
The Conference Board Leading Economic Index® (LEI)for theU.S. increased 0.1 percent in October to 112.1 (2016 = 100), following a 0.6 percent increase in September, and a 0.5 percent increase in August.
“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.”
The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.2 percent in October to 104.7 (2016 = 100), following a 0.1 percent increase in September, and a 0.3 percent increase in August.
LEI as an Economic Monitoring Tool:
The methodology for this index was “improved” in December 2011.
As a comparison to the LEI, ECRI’s WLI (which Econintersect reports on weekly) is now in expansion showing weaker growth.
