The Conference Board’s Leading Economic Index for the United States increased 0.7% in June, following a 1.3% gain in May and a 1% rise in April.
“The recession has been losing steam since the spring, although very large job losses continue. Nevertheless, confidence is slowly rebuilding,” says Conference Board economist Ken Goldstein. “Financial markets are less volatile. Even the housing market is stabilizing. If these trends continue, expect a slow recovery this autumn.”
Most of the components contributed positively to the index in June except real money supply, manufacturers’ new orders for nondefense capital goods and consumer expectations. The positive contributors were interest rate spread, building permits, stock prices, weekly initial claims, average weekly manufacturing hours, index of supplier deliveries and manufacturers’ new orders for consumer goods and materials.
The six–month change in the index has risen to 2% percent (a 4.1% annual rate) in the period through June, up substantially from –3.1% (a –6.2% annual rate) for the previous six months.
The three consecutive months of increases in the Leading Economic Index come after a steady decline in the index since it reached its peak in July 2007.
Meanwhile, the Conference Board’s Coincident Economic Index for the United States, which measures current economic activity, remains on a downward trend, but the pace of its decline has moderated somewhat in recent months.
The Coincident Economic Index declined 0.2 % in June, following a 0.3% decline in May and a 0.3% decline in April. Two of the four indicators that make up the index increased in June. The positive contributors were personal income less transfer payments and manufacturing and trade sales. The negative contributors were employees on nonagricultural payrolls and industrial production.
“All in all, the behavior of the composite indexes suggest that the recession will continue to ease and that the economy may begin to recover in the near term,” the Conference Board says.
The Conference Board is a nonprofit organization that publishes economic information and analysis, makes economics–based forecasts and assesses trends.