April 2018 Leading Economic Index

Economic growth is poised to continue according to the Conference Board’s latest release on the Leading Economic Index (LEI).  Their 10-component indicator increased 0.4 percent in April 2018 to 109.4.  This healthy uptick is on the heels of two other strong increases in February and March of 0.7 percent and 0.4 percent respectively.

Eight of the ten components were stronger to start the second quarter.  Bond rates continued looking favorable for ongoing growth as the rate difference between the 10-year Treasury and the overnight federal funds remained positive.  Employment indicators contributed nicely as the average workweek for production workers lengthened and the average weekly claim for state unemployment insurance declined.  New orders for both consumer goods as well as capital investments rose as well.  Consumer expectations for business conditions improved, and the Conference Board’s proprietary leading credit index continued suggesting financial firms are growing more eager to lend. But it wasn’t all good news.

Two components fell in the period.  Both of these segments have struggled this year.  Building permits declined after a strong March and have been lower in four of the past six months.  Stock prices fell in the period and haven’t added to the LEI since January of this year.  Nonetheless, a couple of negative signs in this report were not enough to spoil the sum.

From the looks of this Conference Board release, America’s economic expansion should continue through at least the end of this year.  Atlas detects no worrisome patterns in this forward-looking indicator.  This does not mean we’re complacent, but we are less paranoid than normal.