April 2017 Leading Economic Index: Economic Expansion To Continue And Possibly Strengthen

The Conference Board Leading Economic Index (LEI) for the U.S again improved this month – and the authors state “first quarter’s weak GDP growth is likely a temporary hiccup as the economy returns to its long-term trend of about 2 percent“.

Analyst Opinion of the Leading Economic Index

The rate of growth may be improving on this 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 Bloomberg) expected this index’s value at 0.3 % to 0.4 % (consensus 0.3 %) versus the +0.3 reported.

ECRI’s Weekly Leading Index (WLI) is forecasting slow but marginally slowing growth 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 the U.S. increased 0.3 percent in April to 126.9 (2010 = 100), following a 0.3 percent increase in March, and a 0.5 percent increase in February.

“The recent trend in the U.S. LEI, led by the positive outlook of consumers and financial markets, continues to point to a growing economy, perhaps even a cyclical pickup,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “First quarter’s weak GDP growth is likely a temporary hiccup as the economy returns to its long-term trend of about 2 percent. While the majority of leading indicators have been contributing positively in recent months, housing permits followed by average workweek in manufacturing have been the sources of weakness among the U.S. LEI components.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.3 percent in April to 115.2 (2010 = 100), following a 0.3 percent increase in March, and a 0.1 percent increase in February.

 

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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