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The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.5 percent in December to 124.6. The Coincident Economic Index increased 0.3 percent, and the Lagging Economic Index increased 0.4 percent.
"The U.S. Leading Economic Index increased in December, suggesting the economy will continue growing at a moderate pace, perhaps even accelerating slightly in the early months of this year,” said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “December’s large gain was mainly driven by improving sentiment about the outlook and suggests the business cycle still showed strong momentum in the final months of 2016.”
The improvement in the LEI was fueled by positive contributions from the yield spread, stock prices and average consumer expectations for business conditions. Over the last six months of 2016, the leading economic index grew 1.4 percent (about a 2.8 percent annual rate), much faster than the growth of 0.2 percent (about a 0.3 percent annual rate) over the first half of last year. In addition, the strengths among the leading indicators have become more widespread.
The CEI for the U.S., a measure of current economic activity, rose 1 percent (about a 2 percent annual rate) between June and December 2016, faster than the growth of 0.6 percent (about a 1.2 percent annual rate) over the previous six months. Also, the strengths among the coincident indicators have remained very widespread, with all components advancing over the past six months.
The lagging economic index continued to increase at a slightly higher rate than the CEI. As a result, the coincident-to-lagging ratio is down again.