The Conference Board has just released the “Leading Economic Indicators” for the month of February.? While these arguably don’t really lead, there was another drop to -0.4% for February.? Both components, the “coincident” and “lagging” indicators, came in at the same -0.4% reading.? Estimates from Bloomberg were for a reading of -0.6%.? This data follows a slight increase in January, although that was revised slightly lower.
The CEI drop was driven by continued declines in employment and industrial production. The drop in the LEI continued the general downward trend that began in July 2007, but what interesting is that the data noted that its rate of decline has moderated slightly in recent months.? Before getting too exited about the data, the Conference Board also noted that the six-month decline in the CEI is the largest since 1975 and the data suggests that the economic recession that began in December 2007 will continue in the near term.
The funniest thing to consider about the “Leading Indicators” is the name.? Most of the data is actually old and most of the data is actually known before the numbers actually get published.
The S&P 500 Index was at 735.09 as of the close of February 27.? Even with the drop this morning, that index sits at 790.64.? That is a gain of 7%, but the index sits 16% above the low close of 676.53 on March 9.?? Hence, Leading Indicators look like they are lagging, at least in part.
JON C. OGG
