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Released: Thursday, March 19, 2009

The Conference Board Leading Economic Index™ (LEI) for the U.S. decreased 0.4 percent, The Conference Board Coincident Economic Index™ (CEI) decreased 0.4 percent and The Conference Board Lagging Economic Index™ (LAG) decreased 0.4 percent in February.

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  • The Conference Board LEI for the U.S. declined in February, following a slight increase in January. The monthly increase for December was revised to a small decline, while January's monthly increase was revised lower, due mainly to data revisions in manufacturers' new orders and real money supply. Between August 2008 and February 2009, the index fell 2.1 percent (a -4.1 percent annual rate), faster than the decline of 1.6 percent (a -3.1 percent annual rate) for the previous six months. In addition, the weaknesses among the leading indicators have remained widespread in recent months.
  • The Conference Board CEI for the U.S. fell again in February, driven by continued declines in employment and industrial production. Between August 2008 and February 2009, this index of current economic activity dropped 3.1 percent (a -6.1 percent annual rate), a much larger fall than the decrease of 0.9 percent (a -1.9 percent annual rate) for the previous six months, and the weaknesses among its components have remained widespread in recent months. The Conference Board LAG for the U.S. declined by the same amount as the coincident economic index this month, and as a result, the coincident to lagging ratio was unchanged. Meanwhile, real GDP fell at a 6.2 percent annual rate in the fourth quarter of 2008 (following a decline of 0.5 percent annual rate in the third quarter), the largest quarterly contraction since 1982.
  • Amid widespread deterioration among its components, The Conference Board LEI for the U.S. continued the general downward trend that began in July 2007. But, its rate of decline has moderated slightly in recent months. Meanwhile, The Conference Board CEI for the U.S. remains on a downtrend that began in November 2007, with the decline in the index having accelerated in recent months. The six-month decline in the CEI is the largest since 1975. Taken together, the behavior of the composite economic indexes suggests that the economic recession that began in December 2007 will continue in the near term.

LEADING INDICATORS. Six of the ten indicators that make up The Conference Board LEI for the U.S. increased in February. The positive contributors — beginning with the largest positive contributor — were the interest rate spread, index of supplier deliveries (vendor performance), building permits, real money supply*, manufacturers' new orders for consumer goods and materials* and manufacturers' new orders for nondefense capital goods*. The negative contributors — beginning with the largest negative contributor — were average weekly initial claims for unemployment insurance (inverted), stock prices, the index of consumer expectations, and average weekly manufacturing hours.

The Conference Board LEI for the U.S. now stands at 98.5 (2004=100). Based on revised data, this index increased 0.1 percent in January and decreased 0.1 percent in December. During the six-month span through February, the leading economic index decreased 2.1 percent, with two out of ten components advancing (diffusion index, six-month span equals 20 percent).

COINCIDENT INDICATORS. Two of the four indicators that make up The Conference Board CEI for the U.S. increased in February. The positive contributors to the index — beginning with the larger positive contributor — were personal income less transfer payments* and manufacturing and trade sales*. The negative contributors — beginning with the larger negative contributor — were employees on nonagricultural payrolls and industrial production.

The Conference Board CEI for the U.S. now stands at 102.5 (2004=100). This index decreased 0.6 percent in January and decreased 0.7 percent in December. During the six-month period through February, the coincident economic index decreased 3.1 percent, with one out of four components advancing (diffusion index, six-month span equals 25 percent).

LAGGING INDICATORS. The Conference Board LAG for the U.S. stands at 113.5 (2004=100) in February, with one of seven components advancing. The positive contributor to the index was the ratio of consumer installment credit to personal income*. The negative contributors — beginning with the largest negative contributor — were commercial and industrial loans outstanding*, change in labor cost per unit of output*, and change in CPI for services. The average duration of unemployment (inverted), ratio of manufacturing and trade inventories to sales* and average prime rate charged by banks* held steady in February. Based on revised data, the lagging economic index decreased 0.3 percent in January and decreased 0.1 percent in December.

DATA AVAILABILITY AND NOTES. The data series used to compute The Conference Board Leading Economic Index™ (LEI) for the U.S., The Conference Board Coincident Economic Index™ (CEI) for the U.S. and The Conference Board Lagging Economic Index™ (LAG) for the U.S. and reported in the tables in this release are those available "as of" 12 Noon on March 18, 2009. Some series are estimated as noted below.

* Series in The Conference Board LEI for the U.S. based on our estimates are manufacturers' new orders for consumer goods and materials, manufacturers' new orders for nondefense capital goods, and the personal consumption expenditure used to deflate the money supply. Series in The Conference Board CEI for the U.S. that are based on our estimates are personal income less transfer payments and manufacturing and trade sales. Series in The Conference Board LAG for the U.S. that are based on our 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 used to deflate 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 Conference Board LEI for the U.S.

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

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