2011 Economic Calendar
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Leading Indicators  
Released On 9/22/2011 10:00:00 AM For Aug, 2011
PriorConsensusConsensus RangeActual
Leading Indicators - M/M change0.5 %0.0 %-0.3 % to 0.4 %0.3 %

Flight to cash exaggerates what is an unconvincing 0.3 percent rise in the index of leading economic indicators. As it did in July, money supply by far contributed the most to August's gain as investors moved money out of mutual funds and other investment accounts that are not a part of M2 and parked them into cash accounts which are. The second most positive component in August is the yield spread which has been a leading plus for this report throughout the recovery reflecting the Fed's near zero short rate policy. Building permits are a solid plus with slowing in vendor deliveries a marginal plus.

The drop in stock prices is August's biggest negative followed by consumer expectations and the factory workweek. The outlook for September's LEI is uncertain given the distortions tied to M2 though the yield spread, given the drop now underway in long rates, looks to be less of a positive. Stock prices, given the ongoing drop, look to be a negative. Other details in today's report include a second straight and very thin 0.1 percent gain for the coincident index.

Consensus Outlook
The Conference Board's index of leading indicators rose a very solid 0.5 percent in July, following a 0.3 percent gain the month before. However, July's strength was centered strongly in money supply with a 0.71 percentage point contribution. Normally, money supply growth means banks are lending which is a positive. But in this case, it appears that the jump in M2 was due to investors seeking safety and taking funds out of mutual funds and other investment accounts not a part of M2 and putting funds into more liquid cash-type accounts that are a part of M2. The stock market was a positive in July but that factor is a huge negative for August. Consumer expectations were a negative in July and fell further in August. Vendor performance, in this case fast delivery times, was a negative for July but more recently was a modest positive in August.

The index of leading economic indicators is a composite of 10 forward-looking components including building permits, new factory orders, and unemployment claims. The report attempts to predict general economic conditions six months out.  Why Investors Care

2011 Release Schedule
Released On: 1/202/173/174/215/196/177/218/189/2210/2011/1812/22
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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