US leading economic indicators beat forecasts in June
The US economy was expected to continue to power ahead on the basis of recent trends for interest rate spreads and credit conditions, according to the results of a widely followed barometer for economic activity.
The Conference Board’s index of leading economic indicators jumped by 0.6% month-on-month in June (consensus: 0.3%), thanks to the above factors.
“Housing permits and the interest rate spread drove the latest gain in the LEI, while labour market indicators such as average workweek and initial claims remained unchanged,” said Ataman Ozyildirim, Director, Business Cycles and Growth Research, at The Conference Board.
A jump in building permits boosted the LEI by 0.2 percentage points linked to a pending tax change which stoked multifamily activity in the Northeast of the country, economists at Barclays explained.
Nonetheless, even excluding those the index would have increased 0.4% in June and by another 0.5% in May.
“Both readings exceed the trend growth rate of the index of about 0.2% month-on-month,” Barclays said in a research note e-mailed to clients.
“On balance, the Conference Board’s index mirrors the broad pickup in economic data in recent months, which we expect will be reflected in a 3.0% reading in next week’s advance estimate of Q2 GDP growth.”
The institute’s index of coincident indicators advanced at a 0.2% month-on-month clip and its index of lagging indicators by another 0.7%.