This February eLEI report brings a first possible glimpse of an upcoming double dip in the US economy. Following 10 consecutive months of increase, eLEI has gone down. Growth has pulled back from the previous highs reached and the recession probability has increased dramatically. It will be important to continue to watch the recession probabilities index to determine if the course reverses.
February eLEI US Leading Indicator Down 1.3%
The e-forecasting Leading Economic Index, a forward
-looking composite indicator that forecasts five to six
months ahead, on the average, business activity in
the United States, declined in February.
Following an increase of 1.6 percent in January, eLEI
fell 1.3 in February to 106.5. The index is set to
average 100 in 2000.
On a year-over-year basis, eLEI in February
increased by an annual rate of 10.9 percent
compared with the same month of last year.
Looking at the six-month growth rate of the leading
indicator, which historically has signaled impending
turning points in business activity, eLEI went up 7.8
percent in February, following a rise of 12.3 percent in
January.
The probability of an impending recession in the next
five to six months in the United States, registered 18
percent in February. As a result, the probability of
business expansion in the near future were at the 82
percent mark in February, lower than January's
reading of 99 percent.
Two of the seven components that make up the Real
Time U.S. Leading Economic Indicator improved in
February: Manufacturers' new orders; Housing
activity.
The five components that had a negative or zero
contribution to the composite leading indicator were:
Stock prices; Consumer expectations; Interest rate
spread; Manufacturers' productivity; Foreign demand.
For information on the full eLEI report that goes beyond these highlights, or to learn more about its companion reports the US monthly GDP and US macro monthly forecast, contact [email protected].
Source: e-forecasting.com. For more information, contact: Maria Simos (603) 868-7436 or [email protected]