Leading Economic Index Signals Optimism
|The Leading Economic Index (LEI) continued its upward trend in March, increasing 0.4 percent on the month. Strength in ISM new orders and the interest rate spread components continue to help boost the index.
Another Record High Notched
- The LEI increased 0.4 percent in March, its seventh consecutive month recording a gain. Six of the components added to the topline figure, while two subtracted from it.
- The labor market, which has recently been viewed in a positive light, contributed negatively to the index. Manufacturing hours worked and initial jobless claims subtracted 0.13 percentage points and 0.09 percentage points from the topline figure.
Animal Spirits Unleashed
- Optimistic consumer expectations added 0.12 percentage points to the topline figure, its largest contribution since Dec. 2004.
- The interest rate spread component was the largest contributor to the index in March, adding 0.19 percentage points. ISM new orders and the housing permits components also added 0.19 and 0.11 percentage points, respectively. The LEI’s upward trend continues to signal moderate economic growth in 2017.
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