The coincident index, a measure of current economic activity, increased slightly in April after posting no change in March. Industrial production contributed positively to the index this month, offsetting a negative contribution from the personal consumption of manufactured goods component. The six-month growth rate in the coincident index stands at 0.2 percent (about a 0.3 percent annual rate) during the six-month span through April. In addition, the strengths and weaknesses among the coincident indicators were balanced in recent months.
The leading index has been declining since October 2007 and the weaknesses among the leading indicators remained widespread in recent months. Meanwhile, the expansion of the coincident index slowed below growth rates reached during the first half of 2007. Real GDP grew at a 2.6 percent annual rate in the first quarter of 2008, above the 2.1 percent average annual rate during the second half of 2007. The recent behaviour of the composite indexes suggests that economic growth is likely to be more moderate in the near term.
LEADING INDICATORS
Three of the seven components of the leading index increased in April. The positive contributors to the index - in order from the largest positive contributor to the smallest - are the stock price index, production expectations, and the yield spread. The negative contributors to the index - beginning with the largest negative contributor - are industrial new orders, the inverted new unemployment claims, building permits (residential), and the ratio of the deflator of manufacturing value added to unit labor cost for manufacturing.
With the decrease of 0.1 percent in April, the leading index now stands at 128.6 (1990=100). Based on revised data, this index declined 0.1 percent in March and declined 0.4 percent in February. During the six-month span through April, the leading index decreased 1.8 percent, and one of the seven components increased (diffusion index, six-month span equals 14.3 percent).
COINCIDENT INDICATORS
Three of the four components of the coincident index increased in April. The positive contributors to the index - in order from the largest positive contributor to the smallest - were industrial production, employment*, and wage and salaries*. Personal consumption declined in April.
With the increase of 0.1 percent in April, the coincident index now stands at 123.2 (1990=100). Based on revised data, this index remained unchanged in March and increased 0.1 percent in February. During the six-month period through April, the coincident index increased 0.2 percent, with two of the four series making a positive contribution (diffusion index, six-month span equals 50.0 percent).
