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UNITED STATES DEPARTMENT OF
COM M ERCE
WASHINGTON, D.C.
F O R R E L E A S E 10:00 A . M . , O C T O B E R 30,
Feliks Tamm:
(2 0 2 ) 5 2 3 - 0 5 3 5
B U R E A U OF
E C O N O M I C ANALYSIS
20230
1980
BEA 80-&4 W£
COMPOSITE INDEXES OF LEADING, COINCIDENT, AND LAGGING
INDICATORS: SEPTEMBER 1980
The composite index o f leading ind ic ato r s increased 2 .4 percent in
September to a l e v e l o f 133.6 (1967=100), according to preliminary data
rele as ed today by the Bureau o f Economic A na lys is , U.S.. Department of
Commerce. On the bas is o f more complete data, the August index le vel was
revised to 130.5, which i s 1.7 percent above the revise d July l e v e l of
128.3. Change in t o t a l li q u id a s s e t s was the major contributor to the
August r e v i s i o n .
Eight of ten ind ic at or s a v a i l a b l e for September contributed to the
increase in the index: average workweek, l a y o f f r a t e , vendor performance
( i . e . , companies r ec e iv in g slower d e l i v e r i e s from vendors), change in
to t a l li q u i d a s s e t s , change in s e n s i t i v e raw materials pric es (Producer
Price Index), stock p r i c e s , new orders in 1972 d o l l a r s , and building
permits. Layoff rate contributed the g r e a t e s t increase.
Two o f ten declined: co ntracts and orders for plant and equipment
in 1972 d o ll a r s and money supply in 1972 d o l l a r s . Money supply in 1972
d o ll a r s contributed the g r e a t e s t d e c li n e .
The composite index o f c o in c id e nt i n d i c a t o r s , which i s a monthly
approximation o f aggregate economic a c t i v i t y , increased 0.2 percent in
September to a le v e l o f 136.1 (1967=100). On the bas is of more complete
data, the August index le v e l was revise d to 135.8, which i s 0.1 percent
below the revise d July le v el o f 136.0.
The composite index o f lagging in d ic ato r s increased 3.3 percent in
September to a le ve T -o f 166.9 (1967=100). On the bas is of more complete
data, the August index le v el was revise d to 161.5, which i s 1.4 percent
below the revised July le v el o f 163.8.
- 2 -
The leading index i s designed to pr ed ic t monthly movements in
aggregate economic a c t i v i t y , which i s approximated by the coinc iden t
index. The lagging index i s expected to move, a f t e r a time l a g , in
the same d ir e c t io n as the co in c id e nt index and thus to confirm the
movements in the c oin ci den t index. These concepts are explained more
f u l l y in the Handbook o f C yc lica l In d ic a to r s , a supplement to B usiness
C onditions D igest (BCD)3 a v a i l a b l e from the Superintendent o f Documents
at the price o f $4.00.
More data on the composite indexes, as well as other important
measures o f economic a c t i v i t y , appear in BCD. I t i s a v a il a b le from
the Superintendent o f Documents, U.S. Government Printing O f f i c e ,
Washington, D.C. 20402. Annual su bs cri pt ion : $55.00.
Next r e le a s e d a t e :
December 1 fo r the October composite indexes.
COMPOSITE INDEXES
(D ec.)
(N ov.)
(N ov.)
(M a r.)
P
T
P
T
Ratio scale
-.1 5 0
140
130
120
J llO
150
140
130
120
200
190
180
170
160
150
140
130
120
110
100
NOTE:
P (p ea k ) i n d i c a t e s end o f g e n e ra l b u s in e s s e x p a n sio n and b e g in n in g o f r e c e s s i o n , and T ( tr o u g h ) i n d i c a t e s end o f g e n e ra l b u s in e s s
r e c e s s i o n and b e g in n in g o f e x p a n s i o n ; t h u s , shaded a r e a s r e p r e s e n t r e c e s s i o n s .
Numbers on t h e c h a r t i n d i c a t e l e n o t h o f l e a d s ( - ) a n d l a g s (+)
i n m on th s fr o m b u s i n e s s c y c l e t u r n i n g d a t e s .
Table 1. Composite Indexes of Leading, Coincident, and Lagoing Indicators1
Oct.
1979
No v .
Jan.
Dec.
Feb.
Mar.
1980
May
Apr .
June
July
Aug .
Sept
Monthly index (1967=100)
Leading indicators
Coincident indicators
Lagging indicators
137.8
145.1
175.9
135.6
145.0
179.1
135.4
145.3
178.0
134.9
145.9
178.7
134.3
145.2
181.0
125.7 r 122.7 r 123.9 rl28.3 rl30.5 ol33.6
140.4
137.4
136.1 r 136.0 rl35.8 pl36.1
196.3 183.8 r 16 8 .2 rl63.8 rl61.5 pl66.9
131 .3
143 .1
190 .4
Percent change from preceding mo nth
Leading indicators
Coincident indicators
Lagging indicators
-1.6
0.1
3.1
-1.6
-0.1
1 .8
-0.1
0.2
-0.6
-0.4
0.4
0.4
-0.4
-0.5
1.3
1979
IV
-2 .2
-1 .4
5 .2
-4.3
-1.9
3.1
r-2.4
-2.1
-6.4
1 .0
-0 .9
-8.5
r 1.7
r-0.1
r-1.4
r 3.6
r-0.1
r-2.6
1980
II
I
p 2 .4
oO .2
o 3 .3
III
Quarterly average of monthly index (1967=100)
Leading indicators
Coincident indicators
Lagging indicators
136.3
145.1
177.7
133.5
144.7
183 .4
rl24.1
138.0
rl82.8
pl30.8
ol 36.0
p 16 4 .1
Percent change from preceding quarter
Leading indicators
Coincident indicators
Lagging indicators
p - preliminary
-3.0
0.0
6.2
-2.1
-0.3
3 .2
p5.4
p-1.4
p-10.2
-7.0
-4 .6
r-0.3
r - revised
1See tables 2, 3, and 4 for composition of the indexes.
Table 2.
Net Contributions of the Individual Components to the Composite Index of Leading Indicators
Net contribution
to index1
July
Aug.
to
to
Aug .
Sept
Easic data
Indicator
Direction
of change
hug.
to
Sept
June
July
Aug .
Sept
June
to
July
Average workweek, oroduction workers.
manufacturing (hours)..................
39.1
r 39.0
r39.4
p39.5
-0 .09
0.34
0.10
+
♦Layoff rate, manufacturing (percent)....
2.9
1 .7
2 .0
pi.5
1 .20
-0.30
0.60
+
New orders, mfg., consumer goods and
materials (billions of 1972 dollars)...
29.07
31.66
r31.66
p33.08
0.45
o.o
0.27
+
+
Vendor performance, companies receiving
slower deliveries from vendors (pet.)..
28
32
34
39
0.14
0.07
0.21
Net business formation (index: 1967=100).
114.8
115.3
ell7.4
NA
0.06
0.2 6
MA
Contracts and orders, olant & equipment
(billions of 1972 dollars)............
r 12.6 1
rl3.70
rl2.58
p 12.3 8
0.19
-0 .20
-0 .04
-
Building permits (index: 1967=100).......
87.1
99.8
109.9
126 .3
0 .40
0.28
0.49
+
#Change in inventories on hand and on
order (ann. rate, billions of 1972 $)..
r-12.39
r-15.33
p-1.1.51
NA
-0.19
0.24
NA
“Change in sensitive raw materials prices.
PPI (percent)..........................
r-0.45
0.27
1.12
1.92
0 .30
0.36
0.40
+
Stock prices, 500 common stocks
(index: 1941-43 = 10 )....................
114.55
119.83
123.50
126.51
0.28
0.19
0.18
+
#Change in total liquid assets (percent)..
r 0 .60
r0.63
e0.67
e0.71
0.10
0.13
0.15
+
Money supply (M2) (billions of 1972 $)...
804.1
816 .2
r820.5
p8 17.9
0.58
0 .20
-0.15
-
3.55
1.71
2.38
Percent change in the index2.........
{*) Series is inverted in calculating the composite index of leading indicators:
considered an increase in the series.
a decrease in the layoff rate is
(if) Smoothed by a weighted 4-month moving average (with weights 1,2,2,1) placed at the terminal month of the span.
NA - not available
p - preliminary
r - revised
e - estimated
1Met contribution of each individual component is that component's share in the composite movement of the group.
2The percent change in the index equals the sun of the net contributions of the individual components plus the trend
adjustment factor of 0.099 (except for occasional rounding differences).
Table 3
Net Contributions of the Individual Components to the Composite Index of Coincident Indicators
Net
Basic
data
Indicator
p 9 0 ,296
-0.16
0.21
0.21
+
r 1,002.9
r l ,004.0
p i , 000.9
-0.11
0.05
0.20
-
r l 4 1 .5
r 140.1
r 141.0
p l 4 2 .4
-0.27
0.18
0.35
+
147,805
r l 5 2 ,027
p l 4 8 ,8 7 1
NA
0.62
1,005.1
Percent
NA
-
not
change
in
available
the
p
i n d e x 2 ............
- preliminary
r -
4.
Net
Contributions
of
the
NA
-0.15
0.22
revised
xN e t c o n t r i b u t i o n o f e a c h i n d i v i d u a l c o m p o n e n t is t h a t c o m p o n e n t ' s s h a r e in
2 T h e p e r c e n t c h a n g e in t h e i n d e x e q u a l s t h e s u m o f t h e n e t c o n t r i b u t i o n s of
a d j u s t m e n t f a c t o r of - 0 . 1 6 4 ( e x c e p t f o r o c c a s i o n a l r o u n d i n g d i f f e r e n c e s ) . (
)
*
Table
o
-J
r 8 9 ,8 6 7
i
c
90,047
P e r s o n a l i n c o m e l e s s t r a n s f e r s in 1972
d o l l a r s (annual rate, b i l l i o n d o l lars).
VO
*3"
r 9 0 ,1 0 9
Employees on nonagricultural payrolls
(t h o u s a n d s ) .....................................
Aug.
O
1
June
to
July
July
M a n u f a c t u r i n g a n d t r a d e s a l e s in 1 9 7 2
d o l l a r s ( m i l l i o n d o l l a r s ) ..................
Direction
of c h a n g e
Aug.
to
Sept
Sept
June
I n d ustrial produc t i o n , total
( i n d e x : 1 9 6 7 = 1 0 0 ) ............................
contribution
to i n d e x 1
July
Aug.
to
to
Aug.
Sept
Individual
Components
to
the
the
the
c o m p o s i t e m o v e m e n t of
individual components
Composite
Index
of
Lagging
Net
Basic
data
Indicator
the group,
p l u s the trend
Indicators
contribution
to i n d e x 1
July
Aug.
to
to
Aug.
Sept
Direction
of c h a n g e
Aug.
to
Sept
June
July
Aug.
Sept
J une
to
July
11.7
11.6
12.6
13.1
0.05
-0.51
-0.36
257.50
r2 5 7 . 9 0
p 2 5 7 .43
NA
0.07
-0.09
NA
La b o r cost p er unit of output,
m a n u f a c t u r i n g ( i n d e x : 1 9 6 7 = 1 0 0 ) .........
r l 9 8 .0
200.4
‘ r 2 0 0 .9
p2 01.2
0.38
0.08
0.07
+
Average prime rate charged by banks
(p e r c e n t ) .......................................
12.63
11.48
11.12
12.23
-2.24
-0.70
3.24
+
C o m m e r c i a l and industrial loans
o u t s t a n d i n g ( m i l l i o n d o l l a r s ) ............
159,211
160,318
1 6 2 ,898
165,347
0.15
0.35
0.49
+
R a t i o , c o n s u m e r i n s t a l l m e n t d e b t to
p e r s o n a l i n c o m e ( p e r c e n t ) ..................
14.32
r l 4 .06
p l 3 .96
NA
-0.90
-0.34
NA
-2.62
-1.40
3.34
^ A v e r a g e d u r a t i o n of u n e m p l o y m e n t
(w e e k s ) ..........................................
Manufacturing
t otal, 1972
Percent
and trade inventories,
dollars (billion dollars)..
change
in
the
i n d e x 2 ............
(*) S e r i e s is i n v e r t e d i n c a l c u l a t i n g t h e
u n e m p l o y m e n t is c o n s i d e r e d a n i n c r e a s e in
N A - not a v a i l a b l e
p - preliminary
c o m p o s i t e index
the series.
of
lagging
indicators:
a decrease
in
average
duration
of
r - revised
1N e t c o n t r i b u t i o n of e a c h i n d i v i d u a l c o m p o n e n t is t h a t c o m p o n e n t ' s s h a r e in
2T h e p e r c e n t c h a n g e in t h e i n d e x e q u a l s t h e s u m o f t h e n e t c o n t r i b u t i o n s o f
a d j u s t m e n t f a c t o r of - 0 . 1 7 0 ( e x c e p t f o r o c c a s i o n a l r o u n d i n g d i f f e r e n c e s ) .
the
the
c o m p o s i t e m o v e m e n t of
individual components
the group.
plus the trend
@FedFRASER