Leading indicator in U.S. up in November

The U.S. Conference Board leading indicator rose 1.1 per cent in November.

The U.S. Conference Board leading indicator rose 1.1 per cent in November, the group said Friday.

The leading indicator includes 10 factors measuring finance, manufacturing and consumer behaviour:

  • Average weekly hours, manufacturing.
  • Average weekly initial claims for unemployment insurance.
  • Manufacturers’ new orders, consumer goods and materials.
  • Index of supplier deliveries.
  • Manufacturers' new orders, non-defence capital goods.
  • Building permits, new private housing units.
  • Stock prices, 500 common stocks.
  • Money supply, M2.
  • Interest rate spread, 10-year treasury bonds less federal funds.
  • Index of consumer expectations.

The index hit 112.4 (2004 = 100) following a 0.4 per cent increase in October and a 0.6 per cent rise in September.

The gain "is an early sign that the expansion is gaining momentum and spreading," board economist Ataman Ozyildirim said.

The board said the six-month change is running at 4.4 per cent at an annual rate, but that is down from an annual rate of 8.1 per cent in the previous six months.

Only one of 10 indicators in the index — building permits — fell in November. In the six-month period, four of 10 indicators were down.

Building permits — a sign of future activity — fell by four per cent to 530,000 in November, the lowest level since April 2009.

Among the rising indicators in November, the index of supplier deliveries posted the biggest gain.

The strengths among the indicators have become more pronounced than the weaknesses in recent months.

Looking ahead, board economist Ken Goldstein said, "The indicators point to a mild pickup after a slow winter." But in the medium term, weakness in housing and employment could become problems.