Leading Indicators in U.S. Fell for a Second Month in January

The index of U.S. leading economic indicators decreased in January for a second month, reflecting a slump in stock prices as well as a pickup in jobless claims that has since reversed.

The Conference Board’s measure of the economic outlook for the next three to six months fell 0.2 percent in January after sliding a revised 0.3 percent the month before, the New York-based group said Thursday. The January decrease matched the median forecast in a Bloomberg survey of economists.

Four of the 10 indicators of the composite measure decreased, led by the rout in stocks and more applications for jobless benefits. A drop in factory orders and fewer building permits also weighed on the index. 

“Despite back-to-back monthly declines, the index doesn’t signal a significant increase in the risk of recession, and it’s six-month growth rate remains consistent with a modest economic expansion through early 2016,” Ataman Ozyildirim, director of business cycles and growth research at the Conference Board, said in a statement.

Jobless Claims

A separate report Thursday showed initial jobless claims unexpectedly fell last week to a three-month low. The number of applications dropped by 7,000 to 262,000 in the week ended Feb. 13, the lowest since Nov. 21, according to the Labor Department. Last week coincided with the period that the government surveys businesses and households to calculate payrolls and the jobless rate for February.

Stocks have also rebounded this week.

Economists’ estimates in the Bloomberg survey for the LEI ranged from a 0.6 percent drop to 0.2 percent advance, after a previously reported December drop of 0.2 percent.

The Conference Board’s coincident economic index, a measure of current economic activity, rose 0.3 percent in January, the biggest advance in four months after a 0.1 percent increase in December. The index tracks payrolls, incomes, sales and production -- the measures used by the National Bureau of Economic Research to determine the beginning and end of U.S. recessions.

The gauge of lagging indicators advanced 0.1 percent in January after a 0.2 percent gain the month before.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE