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The leading index increased 0.3 percent, the coincident index increased 0.2 percent, and the lagging index increased 0.3 percent in November. Taken together, the three composite indexes and their components show a healthy economy:
- The coincident indicators point to GDP rising in the 4th quarter of 1999.
- The leading indicators point to a continuation of the expansion.
- Cyclical imbalances and related economic instability problems should be monitored for future increases.
LEADING INDICATORS. Six of the ten indicators that make up the leading index rose in November. The most significant increases-in order from the largest positive contributor to the smallest-are stock prices, manufacturers' new orders of consumer goods and materials, and money supply. The most significant negative contributor to the composite leading index in November is interest rate spread.
The leading index now stands at 108.3 (1992 equals 100). Based on revised data, this index increased 0.1 percent in October and decreased 0.1 percent in September. During the six-month span through November, the leading index rose 0.8 percent, and eight of the ten components advanced, with one component holding steady (diffusion index, six-month span equals 85 percent).
COINCIDENT INDICATORS. All three of the available components of the coincident index-employees on nonagricultural payrolls, industrial production, and personal income less transfer payments-increased in November. (Data on manufacturing and trade sales are not yet available.)
With the increase of 0.2 percent in November, the coincident index stands at 126.4 (1992 equals 100). Based on revised data, this index increased 0.6 percent in October and held steady in September. During the six-month period through November, the coincident index increased 1.8 percent, with all four components making positive contributions.
LAGGING INDICATORS. With the increase of 0.3 percent in November, the lagging index stands at 108.9 (1992 equals 100). Commercial and industrial loans outstanding, change in CPI for services, and average duration of unemployment are the most significant positive contributors to the lagging index. The only negative contributor in November is change in labor costs per unit of output. Based on revised data, the lagging index decreased 0.3 percent in October and increased a 0.3 percent in September.
The data series used to compute the three composite indexes and reported in the tables in this release are those available as of 12 Noon on December 28, 1999.
REVISIONS AND COMPOSITE INDEX METHODOLOGY. Under normal circumstances, updates to the leading, coincident, and lagging indexes only incorporate revisions to data over the past six months. Long-history revisions (covering changes in the components that fall outside the moving, six-month window) are scheduled for December of each year. Further information on the revision process, full description of the composite index methodology, and the complete set of new historical values for all three composite indexes are available on the BCI website, www.tcb-indicators.org.
The schedule for the Leading Economic Indicators news release in 2000:
December data ... Wednesday February 2, 2000 January data ... Thursday March 2, 2000 February data ... Tuesday April 4, 2000 March data ... Tuesday May 2, 2000 April data ... Wednesday May 31, 2000 May data ... Wednesday July 5, 2000 June data ... Wednesday August 2, 2000 July data ... Wednesday August 30, 2000 August data ... Tuesday October 3, 2000 September data ... Thursday November 2, 2000 October data ... Monday December 4, 2000 November data ... Wednesday December 27, 2000 All releases are at 10:00 A.M. ET
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Table 1.--Summary of Composites Indexes
1999
May June July Aug. Sept. Oct. Nov.
Leading index 107.4 107.7 108.0 108.0 107.9 108.0 r 108.3 p
Percent change .3 .3 .3 .0 -.1 .1 r .3 p
Diffusion index 90.0 75.0 75.0 50.0 35.0 65.0 r 60.0
Coincident index 124.2 124.8 125.1 125.4 125.4 r 126.1 r 126.4 p
Percent change .3 .5 .2 .2 .0 r .6 .2 p
Diffusion index 87.5 100.0 100.0 r 100.0 50.0 r 100.0 100.0
Lagging index 108.3 107.9 108.5 108.6 108.9 r 108.6 r 108.9 p
Percent change -.1 -.4 .6 .1 .3 r -.3 r .3 p
Diffusion index 50.0 35.7 100.0 57.1 r 85.7 21.4 r 80.0
Coincident-lagging 114.7 115.7 115.3 115.5 115.2 r 116.1 r 116.1
ratio
Nov. to Dec. to Jan. to Feb. to Mar. to Apr. to May to
May June July Aug. Sept. Oct. Nov.
Leading index
Percent change 1.1 1.2 1.0 .8 .7 .8 r .8
Diffusion index 85.0 75.0 80.0 80.0 80.0 80.0 r 85.0
Coincident index
Percent change 1.5 1.7 1.8 1.6 1.3 r 1.9 r 1.8
Diffusion index 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Lagging index
Percent change .5 .4 .5 .6 .7 r .2 r .6
Diffusion index 57.1 42.9 57.1 71.4 64.3 42.9 r 80.0
p Preliminary. r Revised (noted only for index levels and one-month percent changes).
The diffusion indexes measure the proportion of the components that are rising. Components that
rise more than 0.05 percent are given a value of 1.0, components that change less than 0.05 percent
are given a value of 0.5, and components that fall more than 0.05 percent are given a value of 0.0.
The full history of composite and diffusion indexes is available on the Internet at www.tcb-indicators.org
Source: The Conference Board
Table 2.--Data and Net Contributions for Components of the Leading Index
1999
Component
May June July Aug. Sept. Oct. Nov.
Leading index component data
Average workweek, production
workers, mfg. (hours).............. 41.7 41.7 41.9 41.8 41.8 41.8r 41.7p
Average weekly initial claims, state
unemployment insurance (thousands)* 305.4 300.5 295 286.6 294.6 288.3 286.5
Manufacturers' new orders, consumer
goods and materials (mil. 1992 dol. 162150 165139 168036 170478 166506r 163307r 169721p
Vendor performance--slower deliveries
diffusion index (percent).......... 51.9 53.1 54.2 51.1 55.9 56.6 55.9
Manufacturers' new orders, nondefense
capital goods (mil. 1992 dol.)..... 49734 47761 51584 52852 52461r 52636r 50907p
Building permits (thous.)............ 1591 1641 1641 1619 1506 1594 1612
Stock prices, 500 common stocks (c)
(index: 1941-43=10)................ 1332.07 1322.55 1380.99 1327.49 1318.17 1300.01 1391.00
Money supply, M2 (bil. 1992 dol.).... 3961.5r 3978.6r 3987.8r 3997.6r 4002.6r 4009.7r 4026.7p
Interest rate spread, 10-year Treasury
bonds less federal funds........... 0.8 1.14 0.8 0.87 0.7 0.91 0.61
Index of consumer expectations (c)
(1966:1=100)....................... 97.6 99.8 99.2 98.4 101.5 97.1 101.0
LEADING INDEX (1992=100)............. 107.4 107.7 108.0 108.0 107.9 108.0r 108.3p
Percent change from preceding month 0.3 0.3 0.3 0 -0.1 0.1r 0.3p
Leading index net contributions
Average workweek, production
workers, mfg....................... .... .00 .05 -.03 .00 .00r -.03 p
Average weekly initial claims, state
unemployment insurance............. .... .02 .03 .04 -.04 .03 .01
Manufacturers' new orders, consumer
goods and materials................ .... .06 .05 .04 -.07r -.06r .12p
Vendor performance--slower deliveries
diffusion index.................... .... .04 .03 -.10 .15 .02 -.02
Manufacturers' new orders, nondefense
capital goods...................... .... -.03 .06 .02 -.01r .00r -.03p
Building permits..................... .... .03 .00 -.01 -.08 .06 .01
Stock prices, 500 common stocks (c) .... -.01 .09 -.08 -.01 -.03 .13
Money supply, M2..................... .... .08 .04 .05 .02 .03r .08p
Interest rate spread, 10-year Treasury
bonds less federal funds........... .... .07 -.07 .01 -.03 .04 -.06
Index of consumer expectations (c) .... .02 -.01 -.01 .03 -.05 .04
p Preliminary. r Revised. n.a. Not available. c Corrected.
* Inverted series; a negative change in this component makes a positive contribution to the index.
(c) Copyrighted. Series from private sources are provided through the courtesy of the compilers and
are subject to their copyrights: Stock prices, Standard & Poor's Corporation; Index of consumer expectations,
University of Michigan's Survey Research Center.
CALCULATION NOTE--The percent change in the index does not always equal the sum of the net contributions
of the individual components (because of rounding effects and base value differences).
Table 3.--Data and Net Contributions for Components of the Coincident and Lagging Indexes
1999
Component
May June July Aug. Sept. Oct. Nov.
Coincident index component data
Employees on nonagricultural payrolls
(thousands)........................ 128162 128443 128816 128945 129048r 129311r 129545
Personal income less transfer payments
(ann. rate, bil. 1992 dol.)........ 5897.0 5951.5 5955.9r 5967.2r 5955.7r 6023.7r 6051.2
Industrial production (index: 1992=10 136.215 136.639 137.363 137.736r 137.974r 139.126r 139.542
Manufacturing and trade sales
(mil. 1992 dol.)................... 799401 806031 807310 815657 811346r 812650p n.a.
COINCIDENT INDEX (1992=100).......... 124.2 124.8 125.1 125.4 125.4r 126.1r 126.4p
Percent change from preceding month .3 .5 .2 .2 .0r .6 .2p
Coincident index net contributions
Employees on nonagricultural payrolls .... .11 .14 .05 .04r .10r .10
Personal income less transfer payment .... .25 .02r .05r -.05r .31r .14
Industrial production................ .... .04 .07 .04r .02r .11r .04
Manufacturing and trade sales........ .... .09 .02 .11 -.06 .02p n.a.
Lagging index component data
Average duration of unemployment
(weeks)*........................... 13.4 14.5 13.6 13.2 12.8 13.2 12.9
Ratio, manufacturing and trade inventories
to sales (chain 1992 dol.)......... 1.31 1.30 1.30 1.28r 1.29 1.29p n.a.
Change in index of labor cost per unit of
output, mfg. (6-month percent, ann. -1.3 -.4 .2 .0r .7r .4r -2.0p
Average prime rate charged by banks
(percent).......................... 7.75 7.75 8.00 8.06 8.25 8.25 8.37
Commercial and industrial loans
outstanding (mil. 1992 dol.)....... 707167 708262 716140r 722121r 727799r 731634r 738759p
Ratio, consumer installment credit out-
standing to personal income (percen 17.40 17.32 17.38 17.39r 17.41r 17.25p n.a.
Change in CPI for services
(6-month percent, ann. rate)....... 2.5 2.4 2.7 2.6 2.5 2.2 2.8
LAGGING INDEX (1992=100)............. 108.3 107.9 108.5 108.6 108.9r 108.6r 108.9p
Percent change from preceding month -.1 -.4 .6 .1 .3r -.3r .3p
Lagging index net contributions
Average duration of unemployment..... .... -.25 .20 .10 .10 -.10r .11
Ratio, manufacturing and trade invent
to sales........................... .... -.09 .01 -.10 .07 -.02p n.a.
Change in index of labor cost per unit of
output, mfg........................ .... .05 .03 -.01r .04r -.02r -.19p
Average prime rate charged by banks.. .... .00 .05 .01 .04 .00 .04
Commercial and industrial loans
outstanding........................ .... .02 .12 .09 .09r .06r .16p
Ratio, consumer installment credit out-
standing to personal income........ .... -.08 .06 .01r .02r -.17p n.a.
Change in CPI for services........... .... -.02 .05 -.02 -.02 -.05r .14
CPI Consumer Price Index. For additional notes see table 2.
