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"With February's large gain, the U.S. LEI returned to the strengthening upward trend that began last September," says Ataman Ozyildirim, economist at The Conference Board. "The LEI is pointing to an economic expansion that should gain more momentum in the coming months. In February, improvements in labor markets, financial components, and consumer expectations more than offset falling housing permits."
With February's increase, the U.S. LEI is about 16 percent above its most recent trough in March 2009, and remains at an all-time historical high. However, the U.S. CEI, a measure of current economic conditions, is only about 3 percent above its most recent trough in June 2009, when the recession ended.
The LEI for the U.S. now stands at 113.4 (2004=100). The six-month change in the index stands at 3.9 percent (an 8 percent annual rate), up from 1.8 percent (a 3.6 percent annual rate) for the previous six months. In addition, the strengths among the leading indicators have remained widespread in recent months.
The Conference Board CEI for the U.S. now stands at 102.5 (2004=100). Between August 2010 and February 2011, the index increased 1.2 percent (a 2.4 percent annual rate), in line with the growth of 1.3 percent (a 2.6 percent annual rate) for the previous six months. In addition, the strengths among the coincident indicators have remained very widespread, with all components advancing over the past six months.
The lagging economic index increased at the same pace as the CEI in February, and the coincident-to-lagging ratio remained unchanged, as a result. Meanwhile, real GDP expanded at a 2.8 percent annual rate in the fourth quarter of 2010, following growth of 2.6 percent annual rate in the third quarter.
The Conference Board LAG for the U.S. stands at 108.0 (2004=100).
"Latest data point to an improving economy, one that will continue to gain strength through the summer," says Ken Goldstein, economist at The Conference Board. "The economy continues to encounter strong headwinds. One headwind is the sharp rise in food and energy prices. Still, the way inflation will move is unclear, given the degree of slack in the overall economy, and especially in the labor market."