Leading Indicators Suggest Economy to Continue Expanding at Moderate Pace through Early 2017

The Conference Board, New York, reported its Leading Economic Index for the U.S. increased by 0.2 percent in September to 124.4, following an 0.2 percent decline in August and an 0.5 percent increase in July.

The Coincident Economic Index increased by 0.2 percent in September to 114.2, following no change in August and an 0.3 percent increase in July. The Lagging Economic Index also increased by 0.2 percent in September to 122.3, following an 0.2 percent increase in August and no change in July.

“The six-month growth rate suggests that the economy should continue expanding at a moderate pace through early 2017,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research with The Conference Board. “Housing permits, unemployment insurance claims and the interest rate spread were the main components lifting the index in September. Overall, the strengths among the leading indicators are outweighing modest weaknesses in stock prices and the average workweek.”

Sam Bullard, senior economist with Wells Fargo Securities, Charlotte, N.C., said the 1.5 percent year-over-year pace is consistent with the slow-growth environment expected to unfold in the year ahead.

“Positive monthly gains in the LEI help support a low probability of a near-term U.S. recession,” Bullard said. “That said, the LEI performance also points to the limitations of just how fast the U.S. economy is likely to expand over the coming year.”