Leading indicators

April 2009

The rate of decline of the smoothed version of the leading indicator slowed from 1.5% in March to 1.1% in April. Both financial components increased in the month, as the money supply expanded steadily while the stock market turned up. The unsmoothed version of the index rose 0.5%, after seven straight declines. Five of the ten components rose in the unsmoothed version.

The indicators of household demand continued to descend. The drop in the housing index eased to 1.2%, the smallest decline in seven months as existing home sales firmed. Sales of durable goods continued to retrench. A levelling off of services employment originated more in personal than business services.

The manufacturing indicators fell less rapidly than the month before. New orders slowed to a 7.3% decrease. Lower inventories helped moderate the rate of decline in the ratio of shipments to inventories. Export demand benefited from a slower contraction of the US economy. The leading indicator for the US eased to a 0.3% drop, its smallest loss in six months.