Leading Economic Index Falls In March After Small Increase In February

The Conference Board said the U.S. leading index decreased 0.4 percent, the coincident index increased 0.2 percent, and the lagging index decreased 0.1 percent in March. The leading index declined in March following a small increase in February. The leading index has been essentially flat since October 2004 following a small decline over the previous five months. In addition, there have been more weaknesses than strengths among the components of the leading index in recent months.

Two of the 10 indicators that make up the leading index increased in March. The positive contributors — beginning with the largest positive contributor — were interest rate spread and manufacturers’ new orders for consumer goods and materials. The negative contributors — beginning with the largest negative contributor — were average weekly initial claims for unemployment insurance; building permits; vendor performance; average weekly manufacturing hours; real money supply; index of consumer expectations; stock prices; and manufacturers’ new orders for nondefense capital goods.

The leading index now stands at 115.1 (1996=100). This index increased 0.1 percent in February and decreased 0.3 percent in January. During the six-month span through March, the leading index decreased 0.3 percent, with five out of 10 components advancing.