The Conference Board said the most recent reading of its Leading Economic Index (LEI) indicates the U.S. economy is still growing-- however yet in fits and starts. The group said its LEI increased 0.8% in May, following a 0.4% decline in April, and a 0.7% increase in March.
The largest contributions to the LEI’s growth in May came from the interest rate spread, consumer expectations and housing permits. “The U.S. LEI rebounded in May and resumed its upward trend with a majority of the components supporting this gain,” said Ataman Ozyildirim, one of the economists on the staff of The Conference Board.
“Overall,” stated Ozyilidirim, “despite short-term volatility, the composite indexes still point to expanding economic activity in the coming months.”
The LEI is a composite of 10 different economic data points, including:
- Average weekly hours in manufacturing
- Average weekly initial claims for unemployment insurance
- New orders for consumer goods and materials
- Building permits for new private housing units
- 500 common stock prices
- The money supply
- Interest rate “spread”
According to the Conference Board, despite swings in those and other measures tracked, the economy will likely continue to grow through the summer and fall.
However, that growth will keep on being “choppy,” said Ken Goldstein, another economist with The Conference Board. “Modest economic growth is being buffeted by some strong headwinds, including high gas and food prices and a soft housing market,” he noted.