The Conference Board on Monday announced that the U.S. leading index increased 0.3 percent in March from the previous month.
The leading index now stands at 115.3 (1996=100). Based on revised data, this index remained unchanged in February and increased 0.4 percent in January. During the six-month span through March, the leading index increased 1.8 percent, with seven out of 10 components advancing (diffusion index, six-month span equals 70 percent).
The leading index has now increased by 4.4 percent from its most recent low in March 2003, although growth has slowed somewhat in recent months. The upturn in the leading index since March 2003 signaled stronger economic growth, and correspondingly, real GDP growth picked up to a 6.2 percent annual rate in the second half of 2003. The current growth rate of the leading index is signaling a continuation of relatively strong economic growth in the near term.
Six of the 10 indicators that make up the leading index increased in March. The positive contributors – beginning with the largest positive contributor – were vendor performance, real money supply, average weekly initial claims for unemployment insurance (inverted), building permits, manufacturers’ new orders for consumer goods and materials, and index of consumer expectations. The negative contributors – beginning with the largest negative contributor – were interest rate spread, stock prices, average weekly manufacturing hours, and manufacturers’ new orders for nondefense capital goods.
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