The Conference Board reported that its Leading Economic Index declined 0.2 percent in November. In its press release, the Conference Board said that the six-month growth rate in the index was zero, highlighting the choppiness seen in the economy over the course of the second half of 2012. Ken Goldstein, an economist with the Board noted, “The indicators reflect an economy that remains weak in the face of strong domestic and international headwinds, as it faces a looming fiscal cliff. Growth will likely be slow through the early months of 2013.”
Positive contributions to the index stemmed from increased building permits, improved credit conditions, and a longer average workweek for production workers. These were outweighed though by weaker data on employment claims, manufacturing new orders, stock values, and consumer confidence. Behind the scenes on many of these more-negative indicators were growing anxieties on the part of businesses and consumers related to slowing sales and the fiscal cliff. The result has been an increase in sluggishness among a number of economic variables.
At the same time, the Coincident Economic Index – which measures the current climate – increased 0.2 percent in November. Improvements in the manufacturing sector helped to lift this index, with higher industrial production and manufacturing and trade sales accounting the bulk of the positive contributions. Higher nonfarm payrolls and personal income also were beneficial.
Chad Moutray is the chief economist, National Association of Manufacturers.