Leading Economic Indicators Hit Record High

The Conference Board, New York, said its Leading Economic Index improved for the sixth consecutive month in February, reaching its highest level in more than 10 years, with strong gains across the board.

The LEI increased by 0.6 percent in February to 126.2, following an 0.6 percent increase in January and an 0.6 percent increase in December. The previous high had been 125.9, reached in March 2006.

The Coincident Economic Index increased by 0.3 percent in February to 114.9, following an 0.1 percent increase in January and an 0.4 percent increase in December. The Lagging Economic Index increased by 0.2 percent in February to 123.5, following an 0.2 percent increase in January and an 0.3 percent increase in December.

“Widespread gains across a majority of the leading indicators points to an improving economic outlook for 2017, although GDP growth is likely to remain moderate,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research with The Conference Board. “Only housing permits contributed negatively to the LEI in February, reversing gains over the previous two months.”

Tim Quinlan, senior economist with Wells Fargo Securities, Charlotte, N.C., said strength in manufacturing new orders and interest rate spread components helped boost the index.

“The building permits component was the only component to subtract from the topline,” Quinlan said. “However, the March [National Association of Home Builders] housing index points to builder confidence trending higher, suggesting that this negative drag may be short-lived.”