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Released: Monday, May 19, 2003

The Conference Board announced today that the U.S. leading index increased 0.1 percent, the coincident index decreased 0.1 percent, and the lagging index decreased 0.5 percent in April.

  • After declining in February and March, the leading index increased slightly in April. Since early 2002, the leading index has been fluctuating around a flat trend. This is consistent with real GDP growth continuing to fluctuate around a 2% to 2.5% average annual rate.
  • Despite rebounding financial indicators and consumer expectations, there is still weakness in the labor market and manufacturing indicators. Weakness in these components reflects the recent declines in manufacturing capacity utilization.
  • The coincident index, a measure of current economic conditions, decreased in April after holding steady in March. The slight decline in the coincident indicators in April is consistent with the weakness in the leading index in the first quarter of 2003.

LEADING INDICATORS. Five of the ten indicators that make up the leading index increased in April. The positive contributors - beginning with the largest positive contributor – were index of consumer expectations, real money supply*, stock prices, interest rate spread, and building permits. The negative contributors to the index - beginning with the largest negative contributor - were vendor performance, average weekly initial claims for unemployment insurance (inverted), average weekly manufacturing hours, and manufacturers’ new orders for nondefense capital goods*. Manufacturers’ new orders for consumer goods and materials* held steady in April.

The leading index now stands at 110.6 (1996=100). This index decreased 0.2 percent in March and decreased 0.5 percent in February. During the six-month span through April, the leading index increased 0.2 percent, with four of the ten components advancing (diffusion index, six-month span equals 40 percent).

COINCIDENT INDICATORS. Two of the four indicators that make up the coincident index increased in April. The positive contributors to the index - beginning with the larger positive contributor - were personal income less transfer payments* and manufacturing and trade sales*. Industrial production and employees on nonagricultural payrolls declined in April.

The coincident index now stands at 114.9 (1996=100). Based on revised data, this index held steady in March and decreased 0.4 percent in February. During the six-month period through April, the coincident index decreased 0.3 percent.

LAGGING INDICATORS. The lagging index decreased 0.5 percent to 98.9 (1996=100) in April, with five of the seven components declining. The negative contributors to the index – beginning with the largest negative contributor – were average duration of unemployment, change in CPI for services, commercial and industrial loans outstanding*, ratio of consumer installment credit to personal income*, and change in labor cost per unit of output*. The positive contributor to the index was ratio of manufacturing and trade inventories to sales*. Average prime rate charged by banks held steady in April. Based on revised data, the lagging index decreased 0.1 percent in March and held steady in February.

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 May 16, 2003. 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, and the personal consumption expenditure deflator for commercial and industrial loans outstanding.

The procedure used to estimate the current month’s personal consumption expenditure deflator (used in the calculation of real money supply and commercial and industrial loans outstanding) now incorporates the current month’s consumer price index when it is available before the release of the U.S. Leading Economic Indicators.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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