The Conference Board reported that the Composite Index of Leading Economic Indicators declined 0.3% in January.
This followed a 0.3% increase in December, and a 0.3% increase in November.
Conference Board Economist Ken Goldstein said, “The picture at the start of 2005 is positive, but more spotty than robust. The leading economic indicators dipped in January, following two straight months of
improvement. Prior to that, the series had turned down for five straight months, but the declines collectively have been relatively modest. Over the same period, the coincident index has remained positive. The spike in energy prices and the lower dollar took some steam out of the economy. But the larger concern remains cautious attitudes. Business concerns about the direction of cash flow could lead to cautious decisions about hiring and rebuilding inventory.”
The Conference Board also reported that the Coincident Index was unchanged in January, following a 1.1% increase in December, and a 0.1% increase in November. The Lagging Index increased 0.3% in January, following a 0.7% decline in December, and a 0.2% decline in November.
The Conference Board announced that the U.S. leading index decreased 0.3 percent, the coincident index remained unchanged and the lagging index increased 0.3 percent in January.
The leading index declined in January, but this follows increases in the previous two months, and there were significant upward revisions to the leading index from August to December.In addition, there has been more widespread strength in the leading indicators in recent months, with weakness concentrated in vendor performance and the interest rate spread.
The coincident index, an index of current economic activity, held steady in January, and the strength in the coincident index continues to be widespread. At the same time, the growth rate of real GDP has been fluctuating around a 3.5 percent annual rate since the second quarter of 2004, including 3.1 percent in the fourth quarter.
The leading index was on a rising trend from early 2003 to the middle of 2004, but has now fluctuated around a flat trend over the last six or seven months (which is below its long-term trend of a 1.5 percent annual rate). The recent behavior of the leading index is consistent with the economy continuing to expand in the near term, but more slowly than its long-term average growth rate.
Murdok | Breaking eBusiness News
Your source for investigative ebusiness reporting and breaking news.
