Leading Economic Indicators Post Slight Decline

The Conference Board, New York, said its Leading Economic Index declined by 0.2 percent in January.

The overall index fell to 123.2, following an 0.3 percent decrease in December and an 0.5 percent increase in November.

The Coincident Economic Index increased by 0.3 percent in January to 113.2, following an 0.1 percent increase in December and no change in November. The Lagging Economic Index increased by 0.1 percent in January to 120.0, following an 0.2 percent increase in December and an 0.4 percent increase in November.

Ataman Ozyildirim, Director of Business Cycles and Growth Research with The Conference Board, said large declines in stock prices and further weakness in initial claims for unemployment insurance drove the decline. “Despite back-to-back monthly declines, the index doesn’t signal a significant increase in the risk of recession, and its six-month growth rate remains consistent with a modest economic expansion through early 2016,” he said.

Tim Quinlan, economist with Wells Fargo Securities, Charlotte, N.C., said “significant volatility and turmoil” in financial markets took a toll on the LEI in January.

“Despite the sharp decline in stock prices over the month, the strengths in the index were more widespread than the weaknesses, a notable improvement from the December figures,” Quinlan said.