U.S. leading economic index climbs in line with estimates in September
The Conference Board said its leading economic index climbed by 0.5% in September after rising by 0.4% in August. The increase by the index matched economist estimates.
"The US LEI improved further in September, suggesting the US business cycle remains on a strong growth trajectory heading into 2019," said Ataman Ozyildirim, Director and Global Research Chair at the Conference Board.
He added, "However, the LEI's growth has slowed somewhat in recent months, suggesting the economy may be facing capacity constraints and increasingly tight labor markets."
The advance by the headline index reflected positive contributions from eight of the ten indicators that make up the index, including average consumer expectations for business conditions, the ISM New Orders Index, and the interest rate spread.
Meanwhile, negative contributions from average weekly manufacturing hours and building permits limited the upside for the index.
The report also said the coincident economic index inched up by 0.1% in September following a 0.3% increase in August. The uptick reflected positive contributions from all four indicators that make up the index.
On the other hand, the Conference Board said the lagging economic index edged down by 0.1% in September after rising by 0.2% in August.
The modest drop by the lagging index partly reflected negative contributions from the average duration of unemployment, the change in consumer prices for services, the change in unit labor costs.
"Economic growth could exceed 3.5% in the second half of 2018, but, unless the momentum in housing, orders and stock prices accelerates, that pace is unlikely to be sustained in 2019," said Ozyildirim. ■