EmailThe Conference Board's Leading Economic Indicators Index increased 0.3% in August, down from 0.6% in July. The Briefing.com consensus expected the index to increase 0.1%.
Since seven of the 10 components are known prior to the release, the differences between the consensus and the actual data normally come from the three estimated components: manufacturing orders, consumer goods; manufacturer orders, business capital; and M2 money supply.
In this case, the leading indicators remained positive and beat expectations based on extremely high growth in M2. This subindex accounted for 0.70 percentage points of growth in August, the largest contribution since September 2010. M2 has averaged a 0.08 percentage point contribution since the end of the recession.
Building permits also surpassed expectations earlier in the week (620K actual vs. 585K consensus). Since the consensus estimated the leading indicators using their forecasted building permits figure, the beat also contributed to the better-than-expected leading indicators level.
