Friday, 18 May 2007

US leading index falls, other reports more positive

The Conference Board reports that its US leading index declined in April.

The Conference Board announced today that the U.S. leading index decreased 0.5 percent, the coincident index increased 0.2 percent and the lagging index increased 0.2 percent in April...

The leading index now stands at 137.3 (1996=100). Based on revised data, this index increased 0.6 percent in March and decreased 0.6 percent in February. During the six-month span through April, the leading index decreased 0.2 percent, with three out of ten components advancing (diffusion index, six-month span equals thirty percent.)

One of the components that contributed negatively to the index in April was weekly initial claims for unemployment insurance. That does not look like repeating in May. From MarketWatch:

The number of new filings for state unemployment benefits fell by 5,000 in the week ended May 12, the fifth straight decline, bringing claims to their lowest level since early January, the Labor Department said Thursday...

First-time claims fell a revised 8,000 to 298,000 in the previous week, compared with the initial estimate of a drop of 9,000 to 297,000.

The four-week average of initial claims fell 12,000 to 305,500. This marked the lowest level since the week ended April 15, 2006.

In addition, manufacturing continues to show signs of recovery. The Federal Reserve Bank of Philadelphia said its business activity index for the manufacturing sector rose from 0.2 in April to 4.2 in May.

And Ben Bernanke remains sanguine about the impact of the housing market on the rest of the economy. MarketWatch reports:

The slowdown in the housing market probably has further to run, but it won't have a significant impact on the rest of the economy, Federal Reserve Chairman Ben Bernanke said Thursday.

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