The broad improvement of the Leading Economic Index and the stabilization of the Coincident Economic Index suggest that the recession that began in the U.S. in December 2007 will likely ease in the near term, according to the latest report from The Conference Board.
The LEI increased sharply for the second consecutive month in May, increasing 1.2%. Seven of the ten indicators that make up the LEI posted increases. The index rose 1.2% (a 2.4% annual rate) between November 2008 and May 2009, the first time the index has increased over a six-month period since July 2007. The LEI currently stands at 100.2 (2004=100).
The CEI continued to decrease in May, falling 0.2% amid further declines in industrial production and employment. However, two of the four indicators showed improvement. The six-month change in the index stands at -3.3% (a -6.4% annual rate) in the period through May, down from -2.3% (a -4.5% annual rate) during the previous six months.
In May, the lagging economic index for the U.S. fell by the same amount as the coincident economic index (-0.2%), and the coincident-to-lagging ratio remained unchanged, as a result. Meanwhile, real GDP fell at a 5.7% annual rate in the first quarter of the year, following a contraction of 6.3% in the fourth quarter of 2008. None of the seven indicators showed advancement.
