July Leading Indicators Fall 0.4%

The index of leading economic indicators fell 0.4% in July after a drop of 0.2% in June, the Conference Board said Monday.

A key prognosticator of economic activity in the next three to six months, the LEI is a closely monitored report for the trucking industry and a decline suggests bad economic news ahead.

For a six-month period ending in July, the LEI fell 0.1% with six of its ten parts showing some gain.

During July, six of LEI’s components fell – led by stock prices, average weekly manufacturing hours and consumer expectations. Among the four components that showed progress during the month were manufacturers’ new orders for nondefense capital goods and manufacturers orders for consumer goods and materials.

Also in its July report, the Conference Board took the unusual step of undertaking a mid-year benchmark of its composite economic indexes because a good deal of greatly revised data was now available. With respect to the historical high and low points, the benchmarking had no effect, the Board said, but the move “increased the depth of the most recent recession” as seen in the coincident index.

The leading index, the one used most often to project future economic activity, fell 0.4% to 111.7, the Board said. With the adjustments made for new data, June’s index fell 0.2% and May’s report showed a 0.6% rise.

The coincident index rose 0.1% in July, despite the fact that new information has revised it downward overall. The index of lagging indicators also rose 0.1% in July.

The New York-based Conference Board’s report is based on a survey of 5,000 households nationwide.

9246