Leading Indicators Index Shows Second Consecutive Monthly Increase, Monday, May 19, 2008 10:46:41 AM

Monday morning, the Conference Board released its report on leading economic indicators in the month of April, showing that its leading indicators index experienced a modest increase for the second consecutive month.

The report showed that the leading index edged up 0.1 percent in April, matching the increase that was seen in March. Economists had been expecting the index to come in unchanged.

`These data certainly reflect a weak economy but not one in recession,` said Ken Goldstein, Labor Economist at The Conference Board. `Moreover, the small increases in the Leading Index in both March and again in April could be a signal that the economy may not weaken further.`

The modest increase by the index came as positive contributions from the interest rate spread and housing permits more than offset sharp declines in average weekly hours and consumer expectations.

The Conference Board noted that the weaknesses among the leading indicators have become somewhat less widespread in the last two months.

The report also showed that the coincident index was unchanged in April, while the lagging index edged up 0.1 percent.

The continued lack of growth by the coincident index comes as gains in personal income less transfer payments and real manufacturing and trade sales were offset by declines in industrial production and employment.

At the same time, the modest increase by the lagging index reflected positive contributions from commercial and industrial loans outstanding, the change in CPI for services, and the ratio of consumer installment credit to personal income.

While the Conference Board`s leading indicators index is largely regarded as old news because much of the data contained in the report has already been released, the second consecutive monthly increase may still generate some optimism about the strength of the economy.