Mar. Leading Economic Indicators Preview
The Mar. Leading Economic Indicators Index (LEI) is expected at 0.1% following a -0.3% reading in Feb. The Coincident Index has been unchanged for the past three months and the Lagging Index grew 0.2% in Feb. from a 0.1% increase in Jan.
Positive contributions to the LEI Index include:
* An improved M2 Money supply
* A pickup in ISM deliveries
* Improved performance of 10yr Treasury relative to Fed Funds
* Increase in average weekly hours for manufacturers
Downside risks to the LEI Index include:
*Higher Initial Jobless Claims
*Stock market losses
*Deteriorating Consumer Confidence
Positive contributions to the LEI Index should limit the impact of downside risks and help the Index post its first monthly improvement since Sept.
The Coincident index will be suppressed by declines in Non-farm Payrolls and manufacturing sales. The downside potential may however be limited by improvements in Mar. Industrial Production and personal income.
The six-month annualized average was -3% in Feb. after a -4.6% reading in Mar. The “recession threshold” for the six-month annualized Index is -4.5%.