Full text of Bureau of Economic Analysis (BEA) News Releases : Composite Indexes of Leading, Coincident, and Lagging Indicators: September 1982, BEA 82-59

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UNITED STATES DEPARTMENT OF
BUREAU OF
ECONOMIC ANALYSIS
WASHINGTON, D.C.

FOR WIRE TRANSMISSION

20230

10:00 A.M. EDT, FRIDAY, OCTOBER 29, 1982

Larry Moran (202)523-0777

BEA 82-59

COMPOSITE INDEXES OF LEADING, COINCIDENT, AND LAGGING
INDICATORS: SEPTEMBER 1982
The composite index of leading indicators increased 0.5 percent in
September to a level of 130.4 (1967=100), according to preliminary data
released today by the Commerce Department's Bureau of Economic Analysis.
On the basis of more complete data, the index decreased 0.2 percent in
August and increased 1.2 percent in July. A month ago, the Bureau
reported preliminary estimates that showed the index decreased 0.9
percent in August. Change in inventories on hand and on order was the
major contributor to the August revision.
Five of ten indicators available for September contributed to the
increase in the index: manufacturers' new orders for consumer goods and
materials in 1972 dollars, contracts and orders for plant and equipment
in 1972 dollars, building permits, stock prices, and money supply in
1972 dollars. Stock prices contributed the greatest increase.
Four of ten contributed declines: average workweek; initial claims
for state unemployment insurance; change in sensitive crude materials
prices --Producer Price Index (the weighted 4-month moving average of
the monthly changes had a negative effect on the index even though
sensitive prices increased in September); and change in total liquid
assets (the weighted 4-month moving average of the monthly changes had a
negative effect on the index as total liquid assets increased at a
declining rate in September). Average workweek contributed the greatest
decline.
One indicator was unchanged: vendor performance
receiving slower deliveries from vendors).

(i.e.,

companies

The composite index of coincident indicators, which is a monthly
approximation of aggregate economic activity, decreased 0.8 percent in
September to a level of 13.0.3 (1967=100). On the basis of more complete
data, the index decreased 1.0 percent in August and decreased 0.5
^ p e r c e n t in July.
The composite index of lagging indicators decreased 2.6 percent in
September to a level of 170.6 (1967=100). On the basis of more complete
data, the index decreased 3.9 percent in August and decreased 0.7
percent in July.

-

2

-

The leading index is designed to predict monthly movements inj
aggregate economic activity, which is approximated by the coincident
index. The lagging index is expected to move, after a time lag, in the
same direction as the coincident index and thus to confirm the movements
in the coincident index. These concepts are explained more fully in the
Handbook of Cyclical Indicators, a supplement to Business Conditions
Digest (BCD), available from the Superintendent of Documents at the
price of $4.50.
More data on the composite indexes, as well as other important
measures of economic activity, appear in BCD. It is available from the
Superintendent of
Documents,
U.S.
Government
Printing
Office,
Washington, D.C. 20402. Annual subscription: $55.00.
Next release date: November 30 for the October composite indexes.

COMPOSITE INDEXES

Table 1. Composite Indexes of Leading, Coincident, and Lagging Indicators

Year

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Sept.

Oct.

Nov.

Dec.

131.1
111.3
121.2
131.8
139.4
142.8
135.6
136.5
128.2

129.8
109.2
121.7
132.5
140.2
143.0
135.2
136.4
127.2

IQ

IIQ

11 IQ

IVQ

Leading index (1967= 100)

•
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982

132.3
130.1
106.9
124.5
131.9
139.1
142.6
134.7
135.2
125.7

133.4
130.4
106.4
125.7
133.0
140.3
142.3
134.1
134.2
125.2

133.2
130.1
107.1
126.4
135.6
140.3
143.2
131.5
135.8
125.1

132.4
127.7
109.4
126.3
136.0
141.5
140.3
126.2
137.3
126.6

132.4 132.6 132.1 130.9 130.6
127.0 124.9 123.2 120.5 116.9
111.9 115.5 118.3 119.2 119.9
128.0 129.7 130.2 129.9 130.1
135.8 135.5 135.0 136.9 138.0
141.8 142.5 141.2 142.0 142.9
141.4 141.6 141.2 140.1 140.1
123.0 123.9 128.1 130.7 134.4
136.0 135.2 134.8 134.1 130.7
127.7 r128.4 rl29.9 rl29.7 pl30.4

130.8
114.2
120.5
129.9
139.1
143.6
137.8
135.0
128.3

133.0 132.5 131.2
130.2 126.5 120.2
106.8 112.3 119.1
125.5 128.0 130.1
133.5 135.8 136.6
139.9 141.9 142.0
142.7 141.1 140.5
133.4 124.4 131.1
135.1 136.2 133.2
125.3 rl27.6 pl30.0

130.6
111.6
121.1
131.4
139.6
143.1
136.2
136.0
127.9

Leading index— percent change from preceding month (quarter)
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982

0.5
0.2
-2.1
2.3
-0.5
-0.8
-0.3
-0.4
-0.9
-1.2

0.8
0.2
-0.5
1.0
0.8
0.9
-0.2
-0.4
-0.7
-0.4

-0.1
-0.2
0.7
0.6
2.0
0.0
0.6
-1.9
1.2
-0.1

-0.6
-1.8
2.1
-0.1
0.3
0.9
-2.0
-4.0
1.1
1.2

0.0
-0.5
2.3
1.3
-0.1
0.2
0.8
-2.5
-0.9
0.9

0.2
-1.7
3.2
1.3
-0.2
0.5
0.1
0.7
-0.6
0.5

-0.4
-1.4
2.4
0.4
-0.4
-0.9
-0.3
3.4
-0.3
1.2

-0.9
-2.2
0.8
-0.2
1.4
0.6
-0.8
2.0
-0.5
r-0.2

-0.2
-3.0
0.6
0.2
0.8
0.6
0.0
2.8
-2.5
p0.5

0.2
-2.3
0.5
-0.2
0.8
0.5
-1.6
0.4
-1.8

0.2
-2.5
0.6
1.5
0.2
-0.6
-1.6
1.1
-0.1

-1 .0
-1.9
0.4
0.5
0.6
0.1
-0.3
-0.1
-0.8

129.7
121.2
118.4
125.6
134.7
144.3
145.0
140.8
138.5

129.0
117.7
118.9
127.1
135.7
145.5
145.2
141.3
136.5

2.1
-0.3
-4.3
3.6
1.6
0.2
-0.3
-2.1
-0.7
-2.0

-0.4
-2.8
5.1
2.0
1.7
1.4
-1.1
-6.7
0.8
1 .8

-1.0
-5.0
6.1
1.6
0.6
0.1
-0.4
5.4
-2.2
pi.9

-0.5
-7.2
1.7
1 .0
2.2
0.8
-3.1
3.7
-4.0

125.9 126.9 127.6
127.2 126.9 126.1
113.8 113.4 116.4
121.4 123.4 124.2
127.9 130.6 132.1
135.3 139.6 141.1
145.4 144.9 145.1
144.9 138.4 137.1
142.3 142.4 142.4
134.9 rl34.1 pl31.4

129.2
121.0
118.4
125.6
134.7
144.3
145.1
140.6
138.3

Coincident index (1967=100)
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982

124.8
127.7
115.4
120.3
126.3
134.0
144.8
146.1
142.0
134.1

126.1
127.0
113.7
121.6
127.6
135.0
144.9
145.2
142.5
135.7

126.7
126.9
112.3
122.4
129.7
136.9
146.6
143.5
142.4
135.0

126.6
126.6
112.6
123.3
130.0
139.3
144.1
140.5
142.2
134.0

126.9 127.2 127.7 127.2 127.9
127.0 127.1 126.9 126.1 125.4
113.4 114.2 115.1 116.7 117.5
123.4 123.6 124.0 124.3 124.3
130.6 131.3 131.7 131.9 132.6
139.5 140.1 140.5 141.4 141.4
145.6 145.0 145.4 145.0 144.9
138.0 136.7 136.5 136.7 138.1
142.2 142.7 142.8 142.5 141.8
134.9 rl33^3 rl32.6 rl31.3 p l30.3

128.9
124.2
117.9
124.1
133.8
143.0
145.1
139.7
139.9

Coincident index--percent change from preceding month (quarter)
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982

0.7
-1.0
-2.0
1.2
-0.6
-1.3
-0.5
0.6
0.5
-1.8

1.0
-0.5
-1.5
1.1
1.0
0.7
0.1
-0.6
0.4
1.2

0.5
-0.1
-1.2
0.7
1.6
1.4
1.2
-1.2
-0.1
-0.5

-0.1
-0.2
0.3
0.7
0.2
1.8
-1.7
-2.1
-0.1
-0.7

0.2
0.3
0.7
0.1
0.5
0.1
1.0
-1.8
0.0
0.7

0.2
0.1
0.7
0.2
0.5
0.4
-0.4
-0.9
0.4
r-1.2

0.4
-0.2
0.8
0.3
0.3
0.3
0.3
-0.1
0.1
r-0.5

-0.4
-0.6
1.4
0.2
0.2
0.6
-0.3
0.1
-0.2
r-1.0

0.6
-0.6
0.7
0.0
0.5
0.0
-0.1
1.0
-0.5
p-0.8

0.8
-1.0
0.3
-0.2
0.9
1.1
0.1
1.2
-1.3

0.6
-2.4
0.4
1.2
0.7
0.9
-0.1
0.8
-1.0

-0.5
-2.9
0.4
1.2
0.7
0.8
0.1
0.4
-1.4

2.7
-1.5
-6.0
2.5
1.8
0.4
0.8
-0.1
1.2
-2.5

130.0
141.9
120.6
120.2
131.1
152.7
179.1
175.6
184.9

131.5
141.9
120.1
119.9
131.7
155.2
177.9
191.0
181.7

114.2
132.1
136.3
119.1
121.0
135.7
158.1
183.1
185.6
183.3

0.6
-0.6
2.6
0.6
1.1
1.1
0.1
-0.9
0.0
p-2.0

1.3
-4.0
1.7
1.1
2.0
2.3
0.0
2.6
-2.9

119.8 127.1
138.4 142.7
126.1 122.4
119.3 120.5
123.5 126.5
139.9 144.8
162.6 167.3
182.7 163.2
186.8 193.4
184.1 pl76.0

130.4
142.3
121.1
120.3
130.7
152.0
177.6
178.4
185.4

0.8
-0.2
-0.4
1.6
2.1
3.2
-0.3
-4.5
0.1
r-0.6

Lagging index (1967=100)
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982

112.5
132.9
140.6
119.5
120.2
134.1
157.4
178.4
189.1
182.3

114.2
131.8
135.9
119.0
121.0
135.9
158.5
180.8
186.5
184.0

115.9
131.5
132.4
118.7
121.7
137.2
158.4
190.0
181.2
183.7

118.2
135.5
129.0
118.7
122.3
137.8
161.8
196.2
179.4
184.5

119.5 121.7 124.4 127.4 129.6
139.4 140.4 142.2 142.6 143.2
126.9 122.4 122.7 122.4 122.1
119.2 120.1 120.4 120.0 121.1
123.1 125.0 125.2 126.5 127.8
140.0 142.0 143.5 144.5 146.4
162.5 163.6 164.8 166.4 170.6
183.5 168.5 163.6 161.7 164.2
189.6 191.4 192.6 193.5 194.1
184.2 rl83.5 rl82.3 rl75.1 pl70.6

129.6
143.1
122.7
120.7
129.4
148.1
175.9
168.5
189.5

Lagging index--percent change from preceding month (quarter)

t

1973
1974
1975
1976
1977
1978
1979
1980
1981
1982

2.1
1.1
-0.9
-0.5
0.3
1.8
1.4
0.3
-1.0
0.3

1.5
-0.8
-3.3
-0.4
0.7
1.3
0.7
1.3
-1.4
0.9

p, preliminary.

1.5
-0.2
-2.6
-0.3
0.6
1.0
-0.1
5.1
-2.8
-0.2

2.0
3.0
-2.6
0.0
0.5
0.4
2.1
3.3
-1.0
0.4

1.1
2.9
-1.6
0.4
0.7
1.6
0.4
-6.5
5.7
-0.2

1.8
0.7
-3.5
0.8
1.5
1.4
0.7
-8.2
0.9
r-0.4

2.2
1.3
0.2
0.2
0.2
1.1
0.7
-2.9
0.6
r-0.7

2.4
0.3
-0.2
-0.3
1.0
0.7
1.0
-1.2
0.5
r-3.9

1.7
0.4
-0.2
0.9
1.0
1.3
2.5
1.5
0.3
p-2.6

0.0
-0.1
0.5
-0.3
1.3
1.2
3.1
2.6
-2.4

0.3
-0.8
-1.7
-0.4
1.3
3.1
1.8
4.2
-2.4

1.2
0.0
-0.4
-0.2
0.5
1.6
-0.7
8.8
-1.7

4.3
1.3
-4.2
-1.7
0.6
3.8
4.0
3.1
4.0
-1.1

4.9
4.8
-7.5
0.2
2.1
3.1
2.8
-0.2
0.6
0.4

6.1
3.1
-2.9
1.0
2.4
3.5
2.9
-10.7
3.5
p-4.4

2.6
-0.3
-1.1
-0.2
3.3
5.0
6.2
9.3
-4.1

r, 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

Table 2.

Net Contributions of the Individual Components to the Leading, Coincident, and Lagging Indexes

Net contribution
to index

Basic data

Direction
of change

Indicator
June

A ug.

July

June
to
July

Sept

July
to
A ug.

A ug.
to
Sept

Aug.
to
Sept

LEADING INDICATORS
Average workweek, production workers,
manufacturing (hours)..................

39.2

r39.2

39.0

p 3 8 .6

0.00

-0.19

-0.42

*Average weekly initial claims. State
unemployment insurance (thousands)....

551

515

597

671

0.21

-0.46

-0.40

-

New orders, m f g ., consumer goods and
materials (billions of 1972 dollars)...

30.06

30.69

r29.63

p 29.67

0.12

-0.20

0.01

+

Vendor performance, companies receiving
slower deliveries from vendors (pet.)..

38

37

40

40

-0.04

0.12

0.00

0

*Net business formation (index: 1967=100).

NA

NA

NA

NA

NA

NA

NA

Contracts and orders, plant & equipment
(billions of 1972 dollars).............

rll.27

rlO.80

rll.21

p ll.99

-0.11

0.09

0.18

+

75.0

85.8

71.7

81.0

0.43

-0.57

0.43

+

#Change in inventories on hand and on
order (ann. rate, billions of 1972 $)..

r-14.36

r-12.92

p-8.78

NA

0.10

0.28

NA

#Change in sensitive crude materials
prices, PPI (percent)..................

0.22

0.96

0.86

0.58

0.34

-0.05

-0.14

-

Stock prices, 500 common stocks
(index: 1941-43=10)....................

Building permits (index: 1967=100)......

109.70

109.38

109.65

122.43

-0.02

0.02

0.81

+

#Change in total liquid assets (percent)..

rl .00

rei . 0 0

re 1 . 0 8

el .05

0.00

0.28

-0.12

-

Money supply (M2) (billions of 1972 $)...

825.2

827.1

834.6

p836.7

0.10

0.38

0.12

+

1.17

-0.15

0.54

Percent change in Leading index......

COINCIDENT INDICATORS
Employees on nonagricultural payrolls
(thousands) ............................

89,839

r89,535

r89,268

p89,038

-0.27

-0.24

-0.26

Personal income less transfer payments
(annual rate, billions of 1972 $ )....

1,070.3

rl,069.6

rl,068.1

pi,066.3

-0.03

-0.07

-0.11

-

Industrial production, total
(index: 1967=100)......................

rl38.7

rl38.8

rl38.1

pl37.3

0.02

-0.14

-0.21

-

Manufacturing and trade sales
(millions of 1972 dollars).............

152,371

rl51,927

pl49,352

NA

-0.06

-0.37

NA

-0.53

-0.98

-0.76

Percent change in Coincident index....

LAGGING INDICATORS
‘Average duration of unemployment
(weeks) .................................

16.5

15.6

16.2

16.6

0.35

-0.23

-0.23

Manufacturing and trade inventories,
total (billions of 1972 dollars)......

265.18

265.57

p265.72

NA

0.07

0.03

NA

Labor cost per unit of output,
manufacturing (index: 1967=100).......

r231.3

r230.0

r230.1

p229.6

-0.18

0.01

-0.10

-

Average prime rate charged by banks
(percent)...............................

16.50

16.26

14.39

13.50

-0.47

-3.64

-2.60

-

Commercial and industrial loans
outstanding (millions of dollars).....

r213,700

214,499

r214,904

p218,364

0.08

0.04

0.53

Ratio, consumer installment credit to
personal income (percent)..............

12.96

12.85

p l2.83

NA

-0.38

-0.07

NA

-0.65

-3.95

-2.57

Percent change in Lagging index......

+

*Series is inverted in calculating the composite index: a decrease in this series is considered an upward movement.
# 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.

NOTE: The net contribution of an individual component is that component's share in the composite movement of the
qroup. The percent change in the index equals (except for rounding differences) the sum of the net contributions of
the individual components plus the trend adjustment factor of 0.099 for the leading index, -0.164 for the coincident
index, and -0.170 for the lagging index.l
lThe net business formation series is not updated for the period since December 1981 because half of its components are not available.
If the missing components do not become available in the future, the series will be dropped from the leading index or will be reconstructed
using other components.