Leading Indicators Up 0.2 Pct. in Dec.( Nov revised to down by 0.2)

http://story.news.yahoo.com/news?tmpl=story&ncid=716&e=6&u=/ap/20040122/ap_on_bi_ge/economy

Leading Indicators Up 0.2 Pct. in Dec.

By LISA SINGHANIA, AP Business Writer

NEW YORK - The Index of Leading Economic Indicators, a key measure of economic activity, rose 0.2 percent in December, helped by relatively strong consumer spending and growing indications the job market is improving.

The report released Thursday coincided with government data suggesting that the employment picture may be improving. The increase in the Conference Boards Composite Index of Leading Economic Indicators matched analysts' forecasts, and brought the gauge to 114.3.

"All indicators point to continued economic growth," said Ken Goldstein, economist for the private industry group. "More job gains than in November and December are in store for the early months of 2004. Consumer spending growth is relatively strong and the strong recovery in business investment in equipment and software remains on track."

The index of leading indicators is closely watched because it forecasts trends in the economy in the next three to six months. The December figure followed a revised drop of 0.2 percent in November and a 0.5 percent rise in October.

In December, seven of the 10 factors that make up the index increased, including stock prices, building permits and average weekly initial claims for unemployment insurance. <snip>

In December, seven of the 10 factors that make up the index increased, including stock prices, building permits and average weekly initial claims for unemployment insurance.

There is a factor associated with the initial filing figure that goes positive at some point below 400k/wk and is negative somewhere above that. The further below 400k the number gets, the higher the factor added to the indicator gets.

So fewer unemployment gains this week (actually a few weeks ago) equals a higher number in the final result.


There were a couple drags on the final figure as well. The manufacturing workweek pulled it down a tad, but the change in M2 money supply was a BIG negative. Without that drag, the index would have been up more like .4%

It may have been a mistake in the original article, but the November number was revised downward from "up .3%" to "up .2%" not to "down .2%

An important distinction in a leading indicator.

It looks like the Yahoo article has been fixed as well.