The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.8 percent in May, following a 0.4 percent decline in April and a 0.7 percent increase in March. The Coincident Economic Index (CEI) – a measure of current economic activity – increased 0.1 percent, and the Lagging Economic Index (LAG) increased 0.3 percent.

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\”The U.S. LEI rebounded in May and resumed its upward trend with a majority of the components supporting this gain. The Coincident Economic Index, a monthly measure of current economic conditions, continued to increase slowly but steadily,\” says Ataman Ozyildirim, economist at The Conference Board. \”Overall, despite short-term volatility, the composite indexes still point to expanding economic activity in the coming months.\”

The LEI for the U.S. now stands at 114.7 (2004=100). . The interest rate spread, consumer expectations and building permits made large positive contributions to the index this month, more than offsetting the negative contribution from the index of supplier deliveries.

The six-month change in the index has continued to moderate – to 3.0 percent (a 6.0 percent annual rate) in the period through May 2011, down from 4.0 percent (an 8.2 percent annual rate) in February 2011. However, the strengths among the leading indicators have remained widespread in recent months.

The Conference Board CEI for the U.S. now stands at 102.9. The index rose 1.2 percent (a 2.4 percent annual rate) between November 2010 and May 2011, faster than the growth of 0.6 percent (a 1.2 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 continued to increase faster than the CEI, and the coincident-to-lagging ratio fell further. Meanwhile, real GDP expanded at a 1.8 percent annual rate in the first quarter of the year, slower than the growth of 3.1 percent annual rate in the fourth quarter of 2010.

The LAG stands at 109.1, with three of the seven components advancing in May.

\”Modest economic growth is being buffeted by some strong headwinds, including high gas and food prices and a soft housing market,\” says Ken Goldstein, economist at The Conference Board. \”The economy will likely continue to grow through the summer and fall, however it will be choppy.\”