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UNITED STATES DEPARTMENT OF BUREAU OF ECONOMIC ANALYSIS WASHINGTON, D.C. 20230 FOR WIRE TRAN SMI SS ION Larry Moran E D T , THURSDAY, MAY 30, 1985 BEA 85-26 (202)523-0777 COMPOSITE April today 8:30 A.M. INDEXES OF LEADING, COINCIDENT, INDICATORS: APRIL 1985 AND LAGGING The composite index of leading indicators decreased 0.2 perce nt in to 167.4 (1967=100), according to pr el imi na ry estimates released by the Commerce D ep ar tme nt' s Bureau of Econom ic Analysis. On the basis of more complete data, the index increased 0.1 percent in March and 0.7 percent in February. A month ago, the bureau reported estimates that showed the index decreased 0.2 percent in March and in February. Change in inventories on hand and on (increased 0.5 percent brder was the major contrib uto r to both the March and February revisions. Six of 10 indicators available for April contributed to the decline in the index. They were, ordered from the largest negative contributor to the smallest: contracts and orders for plant and equipment in 1972 dollars, money supply in 1972 dollars, vendor performance (i.e., companies receiving slower deliveries from vendors), average workweek, building permits, and net business formation. Four of 10 made positive contributions. They were, ordered from the largest positive contributor to the smallest: manu fa ctu re rs' new orders for consumer goods and m a te ri als in 1972 dollars, change in sensitive mat erials prices, stock prices, and average weekly initial claims for state un employment insurance. The composite index of coincident i n d i c a t o r s , a m o n t h l y a p p r o xi ma ti on of aggregate economic activity, increased 0.1 percent April to 158.6 (1967=100). On the basis of more complete data, the index increased 0.4 percent in March and 0.1 percent in February. The composite index of lagging indicators de creased 0.4 percent April to 126.0 (1967=100). On the basis of more complete data, the index increas ed 0.8 percent in March and 0.7 percent in February. in in - 2 - The leading index is designed to predict m on thl y movements in aggregate economic activity, which is approximated by the coincident index. The lagging index is expected to move, after a time lag, in the same dir ection as the coincident index and thus to confirm the movements in the coincident index. These concepts are explained more fully in the 1984 edition of Handbook of Cyclical Indicators (price $5.50, stock number 003-010-0 012 7- 5) , which is available from the Superint en den t of Documents, U.S. Government Printing Office, Washington, DC 20402. More data on the composite indexes, as well as other important measures of economic activity, appear each month in Business Conditions D i g e s t . also available from the Superintendent of Documents. Annual subscription: $44.00. Next release d a t e : June 28 for the May composite indexes. COMPOSITE INDEXES NOTE: P (peak) indicates the end of general business expansion and the beginning of recession; T (trough) indicates the end of general business recession and the beginning of expansion. Thus, the shaded areas represent recessions. The arrows indicate the length of leads (-) and lags (+), in months, from the business cycle turning dates. Table 1. Composite Indexes of Leading, Coincident, and Lagging Indicators Ye a r 1 976 1977 1978 1 979 1 9 80 1 981 1 982 1 983 1 984 1 983 Jan. Mar . Feb . 1 26 .1 134.5 1 41 .0 147.7 141 .4 1 42. 1 1 35 . 1 145.2 164.5 r l 66 .4 r 128.0 136.5 142.8 147.5 140.4 140.4 135. 7 147. 4 166. 5 1 6 7. 6 Ap r . 128.8 129.3 138. 4 138.5 146.3 144.9 149.3 146.4 137. 4 133 .4 141 . 7 1 4 4 . 6 134. 7 136 .0 150.2 152.5 167.2 1 68 . 1 r r 1 6 7 . 7 p 16 7 . 4 May 13 0 . 5 138. 9 146 .4 147.6 130.9 144.5 136.2 154.4 l 68.2 Leading 1 976 1977 1 978 1979 1 980 1 981 1982 1 983 1 984 1 985 2.7 0 .0 - 1 .0 0.3 0 .6 -0.6 - 0 .8 3 .1 0.7 1 .3 0.6 1 .4 1 .5 1.2 -2.1 0.9 -0.7 1 .9 0.4 rO .1 1 .5 1 .5 1 .3 -0.1 -0.7 - 1 .2 0.4 1.5 1 .2 rO . 7 0 .4 0 .1 1 .0 -1 . 9 -2.9 2.0 1 .0 1.5 0.5 p-0.2 June 131.6 139.8 146.9 146.5 132. 0 143. 2 135.5 157.3 r 166.9 July 0.8 0.6 0.3 -0.7 0 .8 -0.9 -0.5 1. 9 r - 0 .8 index ( 1 96 7 = 100) 132.2 138.5 145.4 145.2 135. 1 142.9 136.2 158.2 163.9 131 .9 140.5 146.2 144.5 138.3 142.4 136. 1 158. 9 164. 5 132 .4 141. 1 1 46 .8 144.5 141.2 139.3 13 7 . 5 160.0 r l 65.9 ch an g e 121 .4 128.3 1 37 . 1 149.3 1 50.7 146. 8 138. 4 134.3 149.5 r 157. 7 r 122. 9 129. 2 138. 3 149.4 149. 6 147. 2 139.9 133.5 1 50 .6 l 57.8 123.6 130.9 140.0 151.2 1 48 . 1 147.2 139. 2 134. 6 151. 1 r l 58.4 124.3 131 .6 143.0 1 49. 1 1 45 . 1 1 47 . 1 138.0 135.6 1 52.6 p i 58. 6 124.6 132.5 1 43 . 1 150.6 142 .4 146.9 138.8 13 7 . 9 153. 9 Coinc i d e n t 1976 1977 1978 1979 1 9 80 1 981 1 982 1 983 1 984 1 985 1 .6 0 .4 -0.7 -0.3 0 .5 0.5 - 1 .8 1 .3 1 .4 r - 0 .4 1 .2 0.7 0 .9 0.1 -0.7 0.3 1 .1 - 0 .6 0.7 rO .1 0.6 1 .3 1 .2 1 .2 - 1 .0 0 .0 -0.5 0.8 0.3 rO .4 0 .6 0 .5 2 .1 -1 .4 -2.0 -0.1 -0.9 0.7 1 .0 pO.l 0.2 0.7 0.1 1 .0 - 1 .9 -0.1 0.6 1.7 0.9 125.5 134.6 145.9 1 50.6 141 .2 147.3 135.2 140 .8 155.8 index-- jercent change 0.2 0 .8 0.8 0.0 -0.9 0.4 - 1 .1 1 .4 1 .0 0.4 0.5 0.6 0 .3 -0.2 0.1 -0.7 0.6 0.1 104.3 103.8 111.4 119. 2 126. 2 121. 7 1 26 .1 115.7 109. 8 r l 24.6 103.8 104.3 111.6 119.7 1 27 . 1 120.7 125.3 115.8 111.3 r 125 . 5 r 102.8 103.3 104.2 104.7 112.3 111. 6 118.8 121.7 130. 2 132.3 119.0 119.0 1 25 . 1 125.9 114.4 113.5 112.8 114.6 126 .5 p 126 .0 103 .4 105. 2 112.8 121.0 129.6 122.2 1 25 . 1 111 .0 116. 4 Lagging -0.5 0.5 0 .2 0.4 0.7 -0.8 - 0 .6 0 .1 1 .4 0.7 prelim inary. -0.5 -0.1 0.6 -0.8 2 .4 - 1 .4 - 0 .2 -1 .2 1 .3 rO . 8 r, -0.5 0.5 -0.6 2 .4 1 .6 0.0 0 .6 -0.8 1 .6 p-0.4 index— percent 0.6 0.5 1 .1 -0.6 -2.0 2.7 - 0 .6 -2.2 1 .6 -0.5 1 .0 0 .8 1 .1 - 3 .2 0 .2 -0.2 - 1 .1 0.9 Dec. 133.5 141 .6 147.6 140. 1 143 .4 137.0 139.4 162. 5 165.3 134. 5 142 .4 147.2 140.5 143.0 136.2 140.9 163.4 r 164 .3 mo n t h -0.2 0.6 0.7 -1 . 9 0.8 -1 . 7 0.8 1. 5 - 1 .0 IQ 127.6 136. 5 142.9 148.2 1 39. 7 141 .4 135.2 147.6 166. 1 r 16 7 . 2 I IQ 1 1 IQ I VQ 130.5 1 39 . 1 146.5 146. 8 1 32 . 1 1 44 . 1 135.9 1 54 . 7 16 7 . 7 r 132. 2 140.0 1 46 .1 144.7 13 8 . 2 141.5 136.6 159. 0 l 64.8 133.4 14 2 . 0 147.6 140.8 142.9 136. 7 139.6 162.8 164.6 (q ua r t er 1 .0 - 0 .2 -0.2 -1.1 0.7 0.1 0.6 0 .1 0.7 0.7 0 .6 -0.3 0.3 - 0 .3 -0.6 1 .1 0 .6 r - 0.6 4.2 2 .3 0 .6 0.4 -0.8 - 1 .0 - 1 .1 5.7 2 .0 r 1 .6 2 .3 1.9 2.5 -0.9 -5.4 1.9 0.5 4.8 1 .0 1 .3 0 .6 -0.3 - 1 .4 4.6 -1 . 8 0.5 2.8 r-1 . 7 0 .9 1 .4 1 .0 -2 . 7 3.4 -3.4 2 .2 2 .4 - 0 .1 125.6 135.8 146. 1 1 50 .4 142.7 146. 5 134.5 143.3 1 56 .0 from 125.3 136.6 147.4 150.3 144.2 144.5 132. 9 145.0 156. 1 126.8 137.2 148. 4 149.9 145.3 143 .0 132. 7 145.9 157.2 127.8 1 38. 1 149.7 1 50. 0 146. 1 140.9 132.6 147.5 1 58.3 122 .6 129.5 138.5 1 50.0 149.5 147. 1 139.2 1 34 . 1 1 50 .4 r l 58. 0 124.6 132.6 143.4 1 50. 1 142.9 147.2 13 8 . 0 13 7 . 8 1 54. 0 125.5 134.9 145. 7 1 50 . 7 141 .6 147. 1 135.4 141.6 155.8 1 26 .6 137.3 148.5 1 50. 1 145.2 142.8 132.7 146. 1 157.2 preceding 0 .1 0 .9 0 .1 - 0 .1 1 .1 -0.5 -0.5 1 .8 0 .1 -0.2 0.6 0.9 - 0 .1 1 .1 - 1 .4 - 1 .2 1 .2 0 .1 mo nt h ( qua r t e r ) 1 .2 0.4 0.7 -0.3 0.8 - 1 .0 -0.2 0.6 0.7 0.8 0.7 0.9 0 .1 0.6 -1 . 5 -0.1 1 .1 0.7 3 .0 2 .3 0.9 1 .0 -0.4 1 .3 -2.5 1 .1 2 .9 rO . 5 1 .6 2 .4 3.5 0 .1 -4.4 0.1 -0.9 2 .8 2.4 0.7 1. 7 1 .6 0.4 -0.9 - 0 .1 - 1 .9 2 .8 1.2 0 .9 1 .8 1 .9 -0.4 2.5 - 2 .9 - 2 .0 3 .2 0 .9 103.8 109.0 117. 1 126.3 1 20 .1 124.5 118. 2 110.0 1 22 . 1 103 . 7 109.4 118. 0 1 26 . 1 123 .0 124.4 116. 7 110.9 122.5 103.8 1 04 . 1 111.8 119.2 127. 8 120.5 125. 5 115.3 111.3 r l 25 .5 103.0 105.4 112. 7 121. 7 1 29. 1 121. 2 125.3 111.4 116.2 103 .4 10 7 . 0 114.8 123.3 12 0 . 6 123.5 122. 7 109.9 120.0 103 .9 108.9 116.8 1 26 . 1 120.7 124.6 118.4 110. 2 122.3 0 .4 1. 5 1 .9 1 .3 -6.6 1 .9 -2.1 - 1 .3 3 .3 0 .5 1.8 1. 7 2 .3 0 .1 0.9 -3 . 5 0 .3 1 .9 i n d e x ( 1 9 6 7 = 1 00) 103.2 107.2 114.8 123.0 120.5 123.3 122.3 110.3 119.9 ch an g e 0.3 -0.1 0.5 0 .0 - 2 .9 0 .1 -0.4 -0.1 1 .1 103.9 10 7 . 7 115.4 124.7 119. 4 124. 7 121.4 109. 7 121.2 from 0 .9 0.4 0.6 -1.1 0.7 -1 .6 0 .5 0 .9 104. 2 108.3 115.3 125.8 119.0 125.0 120.2 109.6 122.3 preceding 0.7 0.5 0.5 1 .4 -0.9 1 .1 -0.7 -0.5 1 .1 0.3 0 .6 -0.1 0 .9 -0.3 0 .2 - 1 .0 -0.1 0 .9 mo nt h (quarter) -0.4 0.6 1 .6 0.4 0.9 -0.4 -1.7 0.4 -0.2 -0.1 0.4 0.8 - 0 .2 2 .4 -0.1 - 1 .3 0.8 0.3 - 1 .2 0 .2 2.7 2 .1 1 .3 -0.2 0.7 -2.6 1 .0 r 2 .6 CO o p, -0.3 0.1 1 .8 1 .0 0 .1 - 1 .1 1 .4 - 0 .9 - 1 .0 rl .7 103.2 106.2 114.3 122.3 121 .8 122.5 124.3 109. 7 118.8 Nov . ( 1967=100) 0 .2 0.2 0.6 -0.3 0.3 -0.2 -0.9 0.1 0 .1 o o 1976 1977 1 978 1 979 1 9 80 1 981 1 982 1 983 1 984 1 985 102.9 106 .3 113. 7 122.3 125.5 122 .4 124.8 109.8 117.5 132.2 141. 9 147.9 141.7 142 .4 136 .9 138.6 162.4 r l 64.2 preceding 0 .4 0.4 0.4 0 .0 2 .1 - 2 .2 1 .0 0.7 rO .9 index 125.3 134.3 145.0 151 .0 140. 8 147.6 136. 4 140.7 155. 7 124.8 133.6 144. 2 1 50.6 1 41. 1 147.5 13 7. 3 139.8 155.5 Lagging 1976 1977 1978 1979 1 9 80 1 981 1 982 1 983 1 984 1985 from -0.2 1 .4 0.6 -0.5 2 .4 - 0 .3 -0.1 0.4 0 .4 0.5 - 0 .9 - 1 .0 -0.9 2.3 -0.2 0.5 0 .6 r - 1 .8 Coincident 1976 1977 1978 1979 1 9 80 1 981 1 982 1 983 1 984 1 985 Oct . Leading index— percent 0 .9 0.3 0.1 0.8 - 1 .9 -0.1 0 .1 1 .2 0 .1 Sept. Aug . 1 .2 0 .8 2 .1 1 .0 0.6 - 0 .2 -3.4 4.4 revised. NOTE: Quarterly data are averages of monthly figures. See table 2 for composition of the indexes. Quarterly percent changes are computed from quarterly data. Net Contributions of the Individual Components to the Leading, Coincident, and Lagging Indexes Table 2. Net Basic data Direction o f change c o n t r i but i o n to index Indicator Jan. Ma r . Feb . Jan. t 0 Feb . Apr. Feb. to Mar . Mar . t o Apr. Mar . t o Ap r . LEADING INDICATORS Average workweek, p r o d u c t i o n w o r k e r s , m a n u f a c t u r i n g ( h o u r s ) ........................................... 40.6 r 4 0 .0 40.4 P4 0 .3 -0.46 0.31 -0.09 i n i t i a l claims, state i n s u r a n c e ( t h o u s a n d s ) .......... 378 402 389 387 -0.17 0.09 0.02 m f g . , c o n s u m e r goods and ( b i l l i o n s o f 1972 d o l l a r s ) . . . 39. 19 3 7 . 83 r 3 6 . 99 p 3 8.0 2 -0.17 -0.11 0.16 47 48 46 44 0.04 - 0 . 08 -0.10 - r i 17.8 r l 18.4 r l 15.2 p l l 5 .1 0.07 -0.38 -0.01 - * Aver age w ee k ly unempl oyment New o r d e r s , m aterials Ve n d o r p e r f o r m a n c e , slower d e l i v e r i e s Net business compani es r e c e i v i n g from ve nd or s ( p e t . ) . . formation (index: 1967=100). C o n t r a c t s and o r d e r s , p l a n t & e q u i p m e n t ( b i l l i o n s o f 1 972 d o l l a r s ) .............................. * 12.80 18.56 r l 5.89 p l 4 . 47 0.81 -0.34 -0.24 - r l 30.4 r l 29.5 r 138.8 135.9 - 0 .02 0.21 -0.08 - $).. r 3 . 22 r 8.90 p l 2 . 52 NA 0 .32 0.20 NA #Change i n s e n s i t i v e m a t e r i a l s p r i c e s ( p e r c e n t ) ......................................................................... r - 0 .53 -0.81 • r - 0 . 97 - 0 . 64 -0.11 -0.06 0.16 + S t o c k p r i c e s , 300 common s t o c k s ( i n d e x : 1 9 4 1 - 4 3 = 1 0 ) ................................................ 0.0 5 + Building permits (index: 1 9 6 7 = 1 0 0 ) ............... # Change i n i n v e n t o r i e s on hand and on o r d e r ( a n n . r a t e , b i l l i o n s o f 1972 171.61 1 80. 88 179.42 180 . 62 0 .33 -0.0 5 $)... 949.4 954.8 r 9 53 .3 p 9 4 9 .1 0.18 - 0 .0 5 Change i n c r e d i t — b u s i n e s s and co n s u me r b o r r o w i n g ( a n n u a l r a t e , p e r c e n t ) ............... 13.9 r 9 .4 p 1 3 .1 NA -0.24 0.19 0.72 0 .06 -0.18 Money s u p p l y Percent ( M2) change (b illio n s in of Leading 1972 I n d e x ............... -0.17 - NA COI NCIDENT I NDICATORS E m p l o y e e s on non a g r i c u 1 1 u r a 1 p a y r o l l s ( t h o u s a n d s ) .................................................................... 96 , 045 r 96 ,161 r 9 6, 514 p96 , 731 0.10 0.30 0.24 + l e s s t r a n s f e r p a y me n t s b i l l i o n s o f 1972 $ ) .......... r l ,200.7 r l , 202.3 r l ,205.8 p i ,208.4 0.07 0.15 0.14 + In d u s tria l production, to ta l ( i n d e x : 1 96 7 = 1 0 0 ) ..................................................... r 1 6 5 .1 r 16 5. 3 r l 65.8 p 16 5 . 4 0 .03 0.08 - 0 .09 - M a n u f a c t u r i n g and t r a d e s a l e s ( m i l l i o n s o f 1 972 d o l l a r s ) .............................. r l 78,633 r l 79, 086 p i 79,396 NA 0 . 06 0 .04 NA 0 .06 0.38 0.13 - 0 . 28 0 .00 -0.13 P e r s o n a l i ncome (annual ra te , Percent ch an g e in Coincident Index.... LAGGING I NDICATORS * A v er a g e d u r a t i o n o f unempl oyment ( w e e k s ) .............................................................................. Ratio, deflated manufacturing in v e n to r ie s to sales, and t r a d e ( r a t i o ) .................. 1 5.3 15.9 15.9 16. 1 r l . 57 r l .58 p i .58 NA 0.13 0 .00 NA output, mfg.-trend ( p e r c e n t ) . . . 89.4 88.9 88.6 p 8 8 .2 -0.18 -0.11 - 0 .22 A v e r a g e p r i m e r a t e c h a r g e d by banks ( p e r c e n t ) ......................................................................... 10.61 10.50 10.50 10.50 -0.08 0 . 00 0 .00 0 $ ) ............... r l 24,912 r l 25,92 8 r l 2 7 , 0 90 p 12 6 , 9 2 4 0.21 0.24 - 0 .0 5 _ R a t i o , c o n s u me r i n s t a l l m e n t c r e d i t t o p e r s o n a l i ncome ( p e r c e n t ) ................................. r l 4.70 p i 5 . 11 NA 0 . 88 0.69 NA 0 . 72 0 .80 Labor c o s t per u n i t a c t u a l as p e r c e n t of of C o m m e r c i a l and i n d u s t r i a l l o a n s o u t s t a n d i n g ( m i l l i o n s o f 1972 Percent * Series ch an g e is 4 Smoot hed NA, not in Lagging inverted in available. I n d e x ............... calculating by a w e i g h t e d p, r 14.93 the composite 4-month moving aver age prelim inary. r, index: (with a d ecr ease weights revised. NOTE: The n e t c o n t r i b u t i o n o f an i n d i v i d u a l c o mp o n e n t i s group. The p e r c e n t ch an g e i n t h e i n d e x e q u a l s ( e x c e p t f o r t h e i n d i v i d u a l c o mp o n e n t s p l u s t h e t r e n d a d j u s t m e n t f a c t o r i n d e x , and 0 . 0 1 8 f o r t h e l a g g i n g i n d e x . e, in 1,2,2,1) this series placed at is the considered terminal _ -0.40 an u pwa r d mo v e me n t . mo n t h o f the span. estimated. t h a t c o m p o n e n t ' s s h a r e i n t h e c o m p o s i t e movement o f t h e r o u n d i n g d i f f e r e n c e s ) t h e sum o f t h e n e t c o n t r i b u t i o n s of of 0 .1 3 9 f o r the l e a d i n g i n d e x , - 0 . 1 7 3 f o r the c o i n c i d e n t
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