U.S. Leading Index Declines Third Time in Six Months

The U.S. leading index, a key barometer of economic conditions, declined 0.6 percent to 137.9 (1996=100) in May, The Conference Board recently reported.

Initial claims for unemployment insurance and the index of consumer expectations were the largest negative contributors to the decline, while manufacturers' orders for nondefense capital goods, manufacturers' orders for consumer goods, and interest rate spread were the positive contributors.

Since November 2005, the leading index has decreased by 0.2 percent, impacted by the decline in housing permits, according to the report.

The coincident and lagging indices, which reflect current and past economic activity, respectively, increased in May.

The coincident index edged up 0.1 percent to 122.7, while the lagging index rose 0.2 percent to 123.

**Taken from the California Association of Realtors Bulletin, dated July 12, 2006.