Economy’s Performance Points Toward Continued Growth Through 2018

The U.S. economy continued to expand in February with The Conference Board’s Leading Economic Index (LEI) for the U.S. climbing 0.6 percent to 108.7. It increased 0.8 percent in January and 0.7 percent in December.

"The U.S. LEI rose again despite a sharp downturn in stock markets and weakness in housing construction in February," says Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. "The LEI points to robust economic growth throughout 2018. Its six-month growth rate has not been this high since the first quarter of 2011. While the Federal Reserve is on track to continue raising its benchmark rate for the rest of the year, the recent weakness in residential construction and stock prices—important leading indicators—should be monitored closely."

The Conference Board’s Coincident Economic Index (CEI), a measure of current economic activity, also increased in February, rising 0.3 percent to 103.3, following a 0.1 percent increase in January and a 0.2 percent decline in December. Its Lagging Economic Index, an indicator representing changes that come only after the economy has begun to follow a particular trend, ticked up 0.4 percent in February to 104.3, after an increase of 0.1 percent in January and a 0.6 percent decrease in December.

The Conference Board’s indexes are composites of leading, coincident and lagging economic indicators designed to highlight peaks and troughs in the business cycle that could be obscured by volatility within individual components. The LEI is comprised of 10 indicators. These include average weekly hours, manufacturing; average weekly initial claims for unemployment insurance; manufacturers’ new orders, consumer goods and materials; the Institute of Supply Management Index of New Orders; manufacturers' new orders, nondefense capital goods excluding aircraft orders; building permits, new private housing units; stock prices, 500 common stocks; the Leading Credit Index; the interest rate spread, 10-year Treasury bonds less federal funds; and average consumer expectations for business conditions.

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