US January Leading Indicators Rise 0.6%

The Conference Board Leading Economic Index (LEI) increased 0.6% for January following a 0.5% gain for December and the January gain was above consensus expectations of a 0.5% increase.

This was the fifth successive increase in leading indicators and the last two releases have shown significant acceleration and there has been an increase of 1.6% over the past six months.

The coincident indicator rose 0.1% for January following a 0.3% increase in December with a 0.8% gain over the past six months.

According to Ataman Ozyildirim, Director of Business Cycles and Growth Research, ‘the January gain was broad based among the leading indicators and, if this trend continues, the US economy may even accelerate in the near term’.

The strength in equity markets during the past few weeks will provide further near-term support to leading indicators while jobless claims, another component of the index, have remained very low with figures below 250,000 for the past 3 weeks. There were also notably strong February readings for the New York Empire manufacturing index and Philadelphia Fed manufacturing index.

These positive factors should feed through into a strong reading for February leading indicators and overall confidence surrounding the growth outlook should remain firm in the short term.

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Tim is a contributing author to EconomicCalendar.com. He is an economist and has been involved in financial markets for over 20 years as an analyst. He specialises in global economic trends, macro policy and central banks. Extensive knowledge, experience and data mining is used to anticipate trends in equities, bonds and forex with a contrarian slant. He is a graduate of the University of York with a degree in Economics/Econometrics.