Global Business Cycle Indicators
Press Release Archive
Released: Thursday, July 18, 2002
The Conference Board announced today that the U.S. leading index held steady, the coincident index increased 0.3 percent, and the lagging index decreased 0.1 percent in June.
- Industrial production had its biggest gain this month since October 1998. This is the most significant factor that helped push the coincident index up in June. The index posted its largest increase in a six-month span since October 2000.
- The coincident index appears to be gaining momentum. While the index has not surpassed the previous peak in December 2000, it has been increasing or flat since the beginning of the year. To date, the index is less than 0.3 percent away from overtaking the December 2000 peak. Moreover, the gains in the index are well diffused. The one- and six-month diffusion for the coincident index have been above 50 percent for the past four months.
- Stock prices and consumer expectations are the primary components that are preventing the leading index from continuing its positive trend in June. The recent wave of questionable corporate practices and the lack of measures aimed at addressing them have largely contributed to the weakness in these two components.
Leading Indicators. Five of the ten indicators that make up the leading index increased in June. The positive contributors to the leading index - from the largest positive contributor to the smallest - were real money supply*, average weekly initial claims for unemployment insurance (inverted), average weekly manufacturing hours, vendor performance, and building permits. The four negative contributors to the index - beginning with the largest negative contributor - were stock prices, index of consumer expectations, interest rate spread, and manufacturers' new orders for nondefense capital goods*. Manufacturers' new orders for consumer goods and materials* held steady in June.
The leading index now stands at 112.4 (1996=100). Based on revised data, this index increased 0.6 percent in May and decreased 0.3 percent in April. During the six-month span through June, the leading index increased 0.9 percent, with six of the ten components advancing (diffusion index, six-month span equals 60 percent).
Coincident Indicators. All four indicators that make up the coincident index increased in June. The largest contributor to the index was industrial production, followed by personal income less transfer payments*, manufacturing and trade sales*, and employees on nonagricultural payrolls.
With the increase in June, the coincident index now stands at 116.2 (1996=100). Based on revised data, this index increased 0.1 percent in May and in April. During the six-month period through June, the coincident index increased 0.8 percent.
Lagging Indicators. The lagging index decreased 0.1 percent to 100.6 (1996=100) in June. Two of the seven components of the lagging index decreased in June. The negative contributors to the index - beginning with the larger negative contributor - were commercial and industrial loans outstanding* and average duration of unemployment. The two positive contributors to the index were change in labor cost per unit of output* and ratio of consumer installment credit to personal income*. Ratio of manufacturing and trade inventories to sales*, change in CPI for services, and average prime rate charged by banks held steady in June. Based on revised data, the lagging index decreased 0.1 percent in May and decreased 0.7 percent in April.
Data Availability. The data series used by The Conference Board to compute the three composite indexes and reported in the tables in this release are those available "as of" 12 Noon on July 17, 2002. Some series are estimated as noted below.
*NOTES: Series in the leading index that are based on The Conference Board estimates are manufacturers' new orders for consumer goods and materials, manufacturers' new orders for nondefense capital goods, and the personal consumption expenditure deflator for money supply. Series in the coincident index that are based on The Conference Board estimates are personal income less transfer payments and manufacturing and trade sales. Series in the lagging index that are based on The Conference Board estimates are inventories to sales ratio, consumer installment credit to income ratio, change in labor cost per unit of output, change in CPI for services, and the personal consumption expenditure deflator for commercial and industrial loans outstanding.
THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.