Thursday, December 17, 2009

Leading Economic Indicators Strong in November

Per the Conference Board:

The Conference Board LEI for the U.S. increased again in November. The interest rate spread, initial unemployment claims (inverted), average weekly hours and housing permits made large positive contributions to the index this month, more than offsetting negative contributions from the index of supplier deliveries and the index of consumer expectations.

The six-month growth in the index has slowed somewhat in recent months -- to 4.7 percent (about a 9.6 percent annual rate) in the period through November, but it remains substantially higher than the increase of 1.2 percent (a 2.4 percent annual rate) from November 2008 to May 2009. In addition, the strengths among the leading indicators have remained widespread in recent months.


  1. "The Conference Board LEI for the U.S. has risen
    for eight months, and it is now slightly higher than its latest peak in July 2007."


    Where was the S&P at the LEI latest peak of July 2007? As is said,the economy is not the markets and the markets aren't the economy.

  2. true. and also depends which market you are referencing. fixed income (high yield, investment grade, and treasuries) have all had positive return since july 2007.

    also important- the LEI is NOT a "level" or "balance" figure. it is a relative performance metric as compared to a previous period. the index is just a measure of that change cumulatively. in other words, even though there are flaws in the lei (too much reliance on interest rate spreads in a zero-bound interest rate world), the short-term figures are much more reliable than long-term figures.