I’m not a big fan of indexes of leading economic indicators (LEI) because they can be misleading. The monthly LEI compiled by the Conference Board for the US has had to be redesigned a couple of times because it diverged so much from the subsequent performance of the index of coincident economic indicators (CEI). However, I continue to monitor both the LEI and the CEI for the US. They both show that the US economy is expanding and should continue to do so.
Of course, there is also the Weekly Leading Index compiled by the Economic Cycle Research Institute (ECRI). It has turned more ominous lately. However, it has been much more volatile than the monthly LEI and CEI since 2008. That might be because it probably gives more weight to financial variables like the S&P 500 and the spread between the yield on corporate junk bonds and the 10-year Treasury yield. I doubt that weekly railcar loadings are included in the ECRI’s forecasting index. Loadings tend to be coincident rather than leading indicators. They may be starting to turn up, especially excluding coal loadings, which have been very weak recently. Leading the way has been loadings of chemicals & petroleum products, which rose to a record high during the week of June 2. Rising to cyclical highs are loadings of motor vehicles and lumber & wood products, which suggests that the auto and housing industries are continuing to recover. (See our US Railcar Loadings & Truck Tonnage.) Today's Morning Briefing: Pass the Sangria.(1) Victory for Spain? (2) Rajoy’s Sangria. (3) The Bond Vigilantes are staying sober. (4) The endgame for debt-financed bailouts? (5) Holes in Spain’s life raft. (6) Votes coming up in Greece and France, and the Fed. (7) The earnings guidance season is ahead. (8) Industry analysts shaving their estimates. (9) Weekly leading indicators and railcar loadings. (10) OECD leading indicators are mixed, but on the soft side. (More for subscibers.) |
Tuesday, June 12, 2012
US Leading and Coincident Weekly Economic Indicators
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