Leading Indicators Finish 2015 Slightly Down

The Conference Board, New York, reported its Leading Economic Index fell slightly in December.  

The LEI declined by 0.2 percent in December to 123,7, following an 0.5 percent increase in both November and October. The Coincident Economic Index increased by 0.1 percent in December to 113.0, following an 0.1 percent increase in November and an 0.2 percent increase in October. The Lagging Economic Index increased by 0.2 percent in December to 119.9, following an 0.3 percent increase in November and an 0.2 percent increase in October.  

Ataman Ozyildirim, Director of Business Cycles and Growth Research with The Conference Board, attributed the December decline to a drop in housing permits and weak new orders in manufacturing. “However, the index continues to suggest moderate growth in the near-term despite the economy losing some momentum at the end of 2015,” he said. “While the LEI’s growth rate has been on the decline, it’s too early to interpret this as a substantial rise in the risk of recession.”  

But Tim Quinlan, economist with Wells Fargo Securities, Charlotte, N.C., said the December report showed weakness was “fairly widespread.”  

“The LEI continues to point to slowing momentum in the U.S. economy,” Quinlan said. “Generally soft readings from factory sector indicators suggest a significant near-term rebound in growth for this sector is unlikely. The headwinds on the factory sector have arguably intensified over the past few months, particularly as the dollar has continued to steadily appreciate and commodity prices have slid further, which should keep activity in this sector subdued.”