The Leading Index perked up slightly, posting a 0.2 percent increase in March, up from a downwardly revised 0.1 percent gain in the previous month. The relatively small gain points to only modest growth ahead.
Transitory Negatives
- Building permits posted a decline in March and acted as the largest weight on the Leading Economic Index, subtracting 0.18 percentage points from growth.
- Manufacturing hours worked and ISM new orders were the other negatives in this month’s report. The factory sector is struggling with cuts to the energy industry and a stronger dollar, but those effects should prove transitory.
Labor Market Positives
- The strongest contributor to the index was initial jobless claims. The labor market continues to be a bright spot amid the various temporary headwinds that have hit the U.S. economy. As a result, consumer expectations and consumer goods also pushed the index higher.
- The interest rate spread provided the second largest gain as rates remain low, while the Leading Credit Index also grew.
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