US Leading Economic Index signals continued economic growth - Wells Fargo

The Leading Economic Index (LEI) grew another 0.4 percent in November, coming off the heels of a 1.2 percent pop in October, noted analysts from Wells Fargo. According to them, momentum in the index remains strong, signaling continued economic growth.

Key Quotes: 

“The LEI has been on an incredible run of growth with the latest print representing the 15th month of consecutive gains for the index. In fact, November and October’s gains taken together represent the largest back-to-back gains the index has experienced in over six years.”

“Six of the index’s components experienced positive growth while three components contracted. Jobless claims sliced 0.13 percentage points from the headline, the greatest detractor. 

“The index was bolstered by the ISM new orders, contributing 0.17 percentage points, and consumer expectations, which added 0.15 percentage points to the headline figure. The combination of hard economic data and sentiment based survey data suggests economic growth will continue in the first half of 2018.”

“The interest rate spread contributed 0.13 points to the index, while the equity bull market and the ensuing rise in stock prices pushed the index 0.06 percentage points higher.”