COMPOSITE INDEXES OF LEADING, COINCIDENT, AND LAGGING INDICATORS: DECEMBER 1995.NEW YORK--(BUSINESS WIRE)--Feb. 20, 1996--The composite index of leading indicators Composite Index of Leading Indicators An index published monthly by the Conference Board used to predict the direction of the economy's movements in the months to come. The index is made up of 10 economic components, whose changes tend to precede changes in the overall economy. increased 0.2 percent in December to 100.7 (1987 equals 100), according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. preliminary estimates prepared by The Conference Board. On the basis of revised estimates, the index decreased 0.2 percent in November and decreased 0.4 percent in October. Over the six months from June to December, the index declined 0.6 percent. The November figures reflected the addition of three components that were not available last month: manufacturers' new orders of consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and and materials, contracts and orders for plant and equipment, and manufacturers' unfilled orders for durable goods durable goods Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. . As a group, they contributed an increase of only 0.03 to the revised November index. In December, eight of the ten available indicators made positive contributions to the leading index. They are--in order from the largest positive contributor to the smallest--average weekly initial claims for state unemployment insurance, stock prices, consumer expectations, change in manufacturers' unfilled orders for durable goods, vendor performance (slower deliveries diffusion index Diffusion Index 1. A measure of the percentage of stocks that have advanced in price or are showing a positive momentum over a defined period. It is used in the technical analysis of stocks. 2. ), money supply in 1987 dollars, manufacturers' new orders of consumer goods and materials, and contracts and orders for plant and equipment. The two negative contributions are--in order from the largest negative contributor to the smallest--change in sensitive materials prices and average factory workweek. Building permits are the only leading economic indicator leading economic indicator An economic or a financial variable that tends to move ahead of and in the same direction as general economic activity. Compare lagging economic indicator. See also index of leading economic indicators. that has not yet been released for December; however, an upward revision for November is incorporated in the index. The composite index of coincident indicators Composite Index of Coincident Indicators An index published by the Conference Board that is a broad-based measurement of current economic conditions, helping economists and investors to determine which phase of the business cycle the economy is currently experiencing.. , has been updated through November but has not been computed for December because two of its four components (personal income and manufacturing and trade sales) are not available. This index increased 0.1 percent in October and 0.2 percent in November to 118.5 (1987 equals 100). September's index was revised to 118.2. The composite index of lagging indicators Composite Index of Lagging Indicators An index published monthly by the Conference Board that is used to confirm the direction of the economy's movements in past months. The index is made up of the following seven economic components, whose changes tend to come after changes in the was not computed for December because three components were missing (ratio of manufacturing and trade inventories to sales, change in unit labor costs, and ratio of consumer installment credit Noun 1. installment credit - a loan repaid with interest in equal periodic payments installment loan consumer credit - a line of credit extended for personal or household use loan - the temporary provision of money (usually at interest) to income) The index decreased 0.1 percent in November to 102.4 (1987 equals 100) and increased 0.2 percent in October. The composite indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. Historically, the cyclical turning points in the leading index have occurred before those in aggregate economic activity, while the cyclical turning points in the coincident co·in·ci·dent adj. 1. Occupying the same area in space or happening at the same time: a series of coincident events. See Synonyms at contemporary. 2. index have occurred at about the same time as those in aggregate economic activity. The cyclical turning points in the lagging index generally have occurred after those in aggregate economic activity. A change in direction in a composite index does not signal a cyclical turning point unless the movement is of significant size, duration, and scope. Summary Table--Composite Indexes 1995 Oct. Nov. Dec. .............................................................. Composite Index Levels and percent change from preceding month .............................................................. Leading index (1987 equals 100) 100.7 100.5r 100.7p %Chg. -.4r -.2r .2p Coincident Index (1987 equals 100) 118.3 118.5p n.a. %Chg. .1 .2p n.a. Lagging Index (1987 equals 100) 102.5r 102.4p n.a. %Chg. .2 -.1p n.a. CONTACT: The Conference Board: Professional Contact: Media Contacts: Michael Boldin: 212/339-0338 Randy Poe: 212/339-0234 Recorded Message: 212/339-0330 Frank Tortorici, 212/339-0231 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion