The Latest Conference Board Leading Economic Index (LEI) for April is now available. The index rose 0.4 percent to 101.4 percent. March was revised up 0.1 percent the two previous months were revised down 0.1 percent (2004 = 100). The latest number came in slightly above the 0.3 percent forecast by Investing.com.
Here is an overview from the LEI technical notes:
The Conference Board LEI for the U.S. increased in April for the third consecutive month. This month's gain was driven by large positive contributions from the yield spread and building permits. In the six-month period ending April 2014, the leading economic index increased 2.9 percent (about a 6.0 percent annual rate), about the same pace as for the previous six months. In addition, the strengths among the leading indicators remain more widespread than the weaknesses. [Full notes in PDF]
Here is a chart of the LEI series with documented recessions as identified by the NBER.
And here is a closer look at this indicator since 2000. We can more readily see that the recovery from the 2000 trough weakened in 2012 but began trending higher in the latter part of the year.
For a more details on the latest data, here is an excerpt from the press release:
“The LEI rose for the third consecutive month, driven largely by improving housing and financial market conditions,” said Ataman Ozyildirim, Economist at The Conference Board. “This latest report suggests the economy will continue to expand, and may even pick up steam through the second half of the year.”
“Despite a brutal winter which brought the economy to a halt, the overall trend in the leading economic index has remained positive,” said Ken Goldstein, Economist at The Conference Board. “If consumers continue to spend, and businesses pick up the pace of investment, the industrial core of the economy will benefit and GDP growth could move closer towards the 3 percent range.”
[Read More: Head and Shoulders: Not Always Reversal Patterns]
For a better understanding of the relationship between the LEI and recessions, the next chart shows the percentage off the previous peak for the index and the number of months between the previous peak and official recessions.
Here is a look at the rate of change, which gives a closer look at behavior of the index in relation to recessions.
And finally, here is the same snapshot, zoomed in to the data since 2000.
Check back next month for an updated analysis.
