Leading Economic Indicators Index Shows Unexpected Increase In January

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Thursday morning, the Conference Board released its report on leading economic indicators in the month of January, showing that its leading indicators index unexpectedly showed a notable increase compared to the previous month.

The report showed that the leading indicators index rose 0.4 percent in January following a revised 0.2 percent increase in the previous month. Economists had expected the index to come in unchanged compared to the 0.3 percent increase originally reported for December.

While the leading indicators index rose for the second consecutive month, the Conference Board noted that the November and December values were revised down as new data for manufacturers' new orders became available.

The bigger than expected increase by the index in January reflected positive contributions from real money supply, the interest rate spread, consumer expectations, manufacturers' new orders for non-defense capital goods, and manufacturers' new orders for consumer goods and materials.

At the same time, the increase was partly offset by negative contributions from average weekly jobless claims, building permits, average weekly manufacturing hours, stock prices, and the index of supplier deliveries.

The Conference Board noted that the leading indicators index decreased 1.9 percent during the six-month span through January, with only three out of ten components advancing.

The report also showed that the coincident economic index decreased by 0.5 percent for the third consecutive month, reflecting negative contributions from industrial production and non-farm payroll employment.

Additionally, the lagging economic index edged down 0.1 percent in January following a revised decrease of 0.2 percent in December.

Negative contributions from the average prime rate charged by banks, the change in unit labor costs, commercial and industrial loans outstanding, and the average duration of unemployment contributed to the modest decrease by the lagging index.

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