The coincident index remained unchanged in November, with employment and wages and salaries being the only positive contributors, offsetting a large negative contribution from industrial production. The six-month growth rate of the coincident index stands at 0.6 percent (approximately a 1.2 percent annual rate of growth) during the six-month span through November. The coincident index remains relatively strong as the strengths among its components have been very widespread throughout the last six months.
The leading index grew slowly, but steadily, throughout 2007 following an essentially flat period in the second half of 2006. At the same time, real GDP growth fluctuated slightly around an average annual rate of 2.0 percent, and picked up to a 3.2 percent annual rate in the third quarter of 2007. The recent behavior of the leading and coincident indexes so far suggests that moderate economic growth is likely to continue in the near term.
LEADING INDICATORS. Four of the seven components of the leading index increased in November. The positive contributors to the index — in order from the largest positive contributor to the smallest — are industrial new orders, the inverted new unemployment claims, the ratio of the deflator of manufacturing value added to unit labor cost for manufacturing, and the yield spread. The negative contributors to the index — beginning with the largest negative contributor — are building permits (residential), and the stock price index. Production expectations remained unchanged in November.
Remaining unchanged in November, the leading index stands at 131.5 (1990=100). Based on revised data, this index increased 0.4 percent in October and increased 0.2 percent in September. During the six-month span through November, the leading index increased 1.2 percent, and four of the seven components increased (diffusion index, six-month span equals 57.1 percent).
COINCIDENT INDICATORS. Two of the four components of the coincident index increased in November. The positive contributors to the index were employment, and wage and salaries. Industrial production declined in November. Personal consumption remained unchanged in November.
