The coincident index also decreased in March, with all but total employment contributing negatively to the index. At the same time, real GDP grew at a 3.6 percent average annual rate in the first quarter of 2007, slightly down from a 4.4 percent average annual rate in the second half of 2007. Although the leading index has weakened in early 2007, the recent behavior in the leading index so far still suggests that moderate economic growth is likely to continue in the near term.
LEADING INDICATORS. Three of the seven components that make up the leading index increased in March. The positive contributors — from the largest positive contributor to the smallest — were the (inverted) index of inventories to shipments, real exports FOB, and the (inverted) yield of government public bonds. Negative contributors — from the largest negative contributor to the smallest — were letter of credit arrivals, value of machinery orders, private construction orders, and stock prices.
With the 0.7 percent decrease in March, the leading index now stands at 157 (1990=100). Based on revised data, this index declined 0.3 percent in February and increased 0.9 percent in January. During the six-month span through March, the leading index decreased 0.8 percent, with two of the seven components advancing (diffusion index, six-month span equals 28.6 percent).
COINCIDENT INDICATORS. One of the four components that make up the coincident index increased in March. The positive contributor the leading index was total employment. Monthly cash earnings, the wholesale and retail sales component, and industrial production declined.
With the 0.7 percent decrease in March, the coincident index now stands at 166.4 (1990=100). Based on revised data, this index increased 1.1 percent in February and increased 0.2 percent in January. During the six-month span through March, the coincident index increased 0.7 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 percent).
