Indicating the U.S. economy will continue expanding through 2018, the Conference Board released a report on Thursday showing a continued increase by its index of leading economic indicators in the month of August.
The Conference Board said its leading economic index rose by 0.4 percent in August after climbing by an upwardly revised 0.7 percent in July.
Economists had expected the index to advance by 0.5 percent compared to the 0.6 percent increase originally reported for the previous month.
“The leading indicators are consistent with a solid growth scenario in the second half of 2018 and at this stage of a maturing business cycle in the U.S., it doesn’t get much better than this,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at the Conference Board.
He added, “The strengths among the LEI’s components were very widespread, further supporting an outlook of above 3.0 percent growth for the remainder of 2018.”
However, Ozyildirim noted the leading index’s growth trend has moderated since the start of the year and said industrial companies more sensitive to the business cycle should be on the lookout for a possible moderation in economic growth next year.
The continued increase by the leading index reflected positive contributions from seven of the ten indicators, including the ISM New Orders Index, the Leading Credit Index, the interest rate spread, and stock prices.
Negative contributions from building permits, average weekly manufacturing hours and manufacturers’ new orders for non-defense capital goods excluding aircraft limited the upside for the index.
The report also said the coincident economic index edged up by 0.2 percent in August, matching the uptick seen in July. All four indicators that make up the index increased in August.
The lagging economic index also rose by 0.2 percent in August after dipping by 0.2 percent in July, reflecting positive contributions from the average duration of unemployment and the ratio of consumer installment credit outstanding to personal income.