New York, NY, December 22, 2005--The Conference Board announced today that the U.S. leading index increased 0.5 percent, the coincident index increased 0.2 percent, and the lagging index increased 0.6 percent in November.
The leading index increased again in November, following a large gain in October. With November’s increase, the six month growth rate of the leading index picked up to about a 3.4 percent annual rate, up from an average of about 1.9 percent (annual rate) in the first half of 2005, and strength among the leading indicators has been widespread since August.
The largest contributor to November’s gain was initial claims for unemployment insurance (inverted), which returned to levels seen before the hurricanes hit the gulf region.
The coincident index, a measure of current economic activity, increased again in November. The coincident index has been increasing at a relatively steady 2.5 percent annual rate since April 2003, but its growth rate has moderated since June 2005. Over the last six months, the main source of growth in the coincident index has been from industrial production and employment; whereas, the personal income and manufacturing and trade sales components have made more modest positive contributions. At the same time, real GDP grew at a 4.1 percent annual rate in the third quarter of 2005, following a 3.3 percent rate in the second quarter.
Seven of the ten indicators that make up the leading index increased in November. The positive contributors – beginning with the largest positive contributor – were average weekly initial claims for unemployment insurance (inverted), real money supply*, index of consumer expectations, stock prices, building permits, interest rate spread, and manufacturers’ new orders for consumer goods and materials. The negative contributors were vendor performance, average weekly manufacturing hours, and manufacturers’ new orders for nondefense capital goods.
The leading index now stands at 138.8 (1996=100). Based on revised data, this index increased 1.0 percent in October and decreased 0.7 percent in September. During the six-month span through November, the leading index increased 1.7 percent, with eight out of ten components advancing (diffusion index, six-month span equals eighty percent).
