The coincident index also remained unchanged in September, following a slight increase in August. A large positive contribution from industrial production was offset by an equally large negative contribution from retail trade. Despite September's no change, the coincident index remains on an upward trend since late 2003.
The leading index has been growing at about a 1.0 to 2.0 percent annual rate in recent months, down from the 5.0 — 6.0 percent annual rate in the first quarter of 2006, and the strengths and weaknesses among its components have become more balanced in recent months. At the same time, real GDP grew at a 2.6 percent average annual rate in the third quarter of 2006, down from the 3.8 percent rate over the first half of 2006. The continued growth in the leading index in recent months suggests that moderate economic growth is likely to continue in the near term.
LEADING INDICATORS. Four of the eight components in the leading index increased in September. The positive contributors to the leading index — in order from the largest positive contributor to the smallest — are new orders in investment goods industries, stock prices, gross enterprises and properties income*, and inventory change series*. Negative contributors — in order from largest to smallest — are yield spread, the growth rate of CPI for services, and new residential construction orders. Consumer confidence remained unchanged in September.
Remaining steady in September, the leading index now stands at 107.3 (1990=100). Based on revised data, this index increased 0.5 percent in August and increased 0.1 percent in July. During the six-month span through September, the leading index increased 0.8 percent, with five of the eight components increasing (diffusion index, six-month span equals 62.5 percent).
COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in September. The positive contributors to the coincident index were industrial production, employed persons, and manufacturing sales. Retail trade declined in September.
Remaining steady in September, the coincident index now stands at 106.8 (1990=100). Based on revised data, this index increased 0.1 percent in August and increased 0.4 percent in July. During the six-month period through September, the coincident index increased 1.3 percent, with three of the four components increasing (diffusion index, six-month span equals 87.5 percent).
