Money Supply Increase Bounces LEIs

October 20, 2008 11:55am by Barry Ritholtz

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Money Supply increased so much this month — it added 0.45 ppt — that it forced the leading economic index (LEI) up 0.3% month-over-month.

Six of the ten indicators that make up the leading index increased in September. The positive contributors were real money supply, index of consumer expectations, interest rate spread, index of supplier deliveries (vendor performance), manufacturers’ new orders for nondefense capital goods, and manufacturers’ new orders for consumer goods and materials.

This was the first gain since April, after having dropped a revised 0.9% in August. The coincident to lagging index, which actually has a stronger correlation with GDP growth, fell 0.3% MoM in September to be down 3.1% YoY (unchanged

Your mileage may vary . . .

Sources:
Global Business Cycle Indicators (PDF)
October 20, 2008
http://www.conference-board.org/economics/bci/pressRelease_output.cfm?cid=1

Leading indicators rise 0.3% in September
First increase since April; further weakness expected
Ruth Mantell
MarketWatch 11:40 a.m. EDT Oct. 20, 2008
http://tinyurl.com/5g7mx3

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