Updated: 18-Feb-10 10:42 ET
| January Leading Indicators |
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| Updated: 18-Feb-10 10:42 ET |
Highlights
- The Conference Board's Leading Indicators Index slowed down in January. After posting a 1.2% increase in December, the Leading Indicators Index increased only 0.3% (consensus +0.5%).
- The coincident index rose 0.2% in January after posting no growth in December. The lagging index fell 0.1% and has been in steady decline since peaking in January 2009.
Key Factors
- The index was fairly volatile in January with several components moving in extreme opposite directions from December's report including: jobless claims (-0.14% in January vs. 0.21% in December), building permits (-0.13% vs. 0.27%), and money supply (-0.29% vs. 0.03%)
The difference between the consensus estimate and the actual number seems to be from the money supply component. This factor is estimated by the Conference Board and is not available prior to the index being released. The money supply component had held around 0.3% for the past three months and it seems the consensus expected it to remain at that level in January.
Since 7 out of the 10 components of the leading index are known prior to the release, the market is not going to use today's report as a strong motivator for moving stock prices.
Big Picture
- The leading indicator index does not provide much information on where the economy is headed. It is composed of 7 key economic variables that are known prior to the release and 3 estimated components. Therefore, the only differences between the actual indicator and the consensus is due to the estimation techiniques for money supply, new orders of nondefense captial goods, and new orders for consumer goods. Usually the differences between the leading indicator estimates and consensus estimates for these variables are minor and do not effect the overall index.
| Category | JAN | DEC | NOV | OCT | SEP |
| Total Index | 0.3% | 1.2% | 1.1% | 0.5% | 1.1% |
| Manufacturing Workweek | 0.13% | 0.07% | 0.34% | 0.07% | -0.07% |
| Initial Claims | -0.14% | 0.21% | 0.28% | 0.10% | 0.19% |
| Cons. Gds Orders | 0.00% | 0.03% | 0.06% | 0.05% | 0.00% |
| Vendor Performance | 0.24% | 0.08% | -0.04% | -0.04% | 0.06% |
| Nondef. Cap Gds Orders | -0.01% | 0.02% | -0.07% | 0.05% | 0.08% |
| Building Permits | -0.13% | 0.27% | 0.18% | -0.11% | -0.02% |
| Stock Prices | 0.04% | 0.08% | 0.07% | 0.08% | 0.13% |
| Real M2 | -0.29% | 0.03% | 0.02% | 0.02% | 0.12% |
| Interest Rate Spread | 0.38% | 0.37% | 0.35% | 0.35% | 0.34% |
| Consumer Expectations | 0.04% | 0.07% | -0.06% | -0.14% | 0.25% |