Submitted by Atlas Indicators Investment Advisors on August 31st, 2018
Economic strength appears to have room to run according to the Conference Board’s July 2018 release of their Leading Economic Index (LEI). This forward-looking indicator rose 0.6 percent in the period after rising 0.5 percent in June. Recent strength bodes well for America’s economy in the second half of this year.
Strength within the elements was widespread. With just one unchanged component, the other nine were positive. Fewer jobless claims led the indicator, followed by an uptick in their leading credit index which is designed to forecast borrowing trends. A positive yield curve was the third strongest portion of the release, and Institute for Supply Management’s new order index followed closely behind. Consumers remained optimistic about business conditions, and the stock market gains helped boost the headline tally as well. Building permits turned in a positive number after declining in the prior three periods. Finally, manufacturers orders for consumer goods as well as capital equipment each added to the total. The lone standout was the workweek for production workers which held unchanged versus the June count.
This forward-looking indicator sees very little chance of an economic disruption here in America for the next couple of quarters. This year should end with an output level which is even greater than the first half of 2018 according to this ten-component measure. For now, the wind is in America’s sails.
