U.S. leading indicators up 0.1% in July
By Rex Nutting, MarketWatch
Last Update: 10:14 AM ET Aug. 18, 2005
WASHINGTON (MarketWatch) -- Leading indicators of U.S. economic
activity increased 0.1% in July, suggesting "moderate growth into
the fall," the Conference Board said Thursday.
Economists had been expecting a 0.3% increase, according to a
survey conducted by MarketWatch. See Economic Calendar.
The leading indicators increased a revised 1.2% in June, up from
0.9% reported last month. The leading indicators were flat in
May.
The coincident indicators rose 0.1% in July, while the lagging
index rose 0.3%.
The leading indicators are designed to forecast economic activity
six to nine months ahead.
Six of the 10 leading indicators increased in July, led by jobless
claims, the interest-rate spread and stock prices.
Three indicators declined, led by vendor performance and money
supply.
Over the past six months, the leading indicators are up 1.1%, with
six of the 10 indicators increasing over that time, "consistent
with the economy continuing to expand moderately in the near term,"
the Conference Board said.
"The spike in energy prices is one factor in this outlook," said
Ken Goldstein, chief economist for the private economic research
group.
"Of more concern is the level of business executive and consumer
confidence. Both investment and hiring intentions reflect a level
of caution over both pricing and profit strategies," he said.
Manufacturing improves in Philly area
Philly Fed index rises to highest level in 4 months
Last Update: 1:38 PM ET Aug. 18, 2005
WASHINGTON (MarketWatch) -- Manufacturing activity improved in the
Philadelphia region in August, the Federal Reserve Bank of
Philadelphia said Thursday.
The Philly Fed index rose to 17.5 in August from 9.6 in July. It's
the highest reading since April.
It was "another report which suggests that manufacturing activity
has strengthened in the third quarter," said John Ryding, chief
U.S. economist for Bear Stearns.
The Philly Fed is of interest chiefly because it can help predict
the national purchasing managers' survey to be released in two
weeks, which in turn is seen as the best single real-time gauge of
economic activity.
Readings over zero indicate most firms surveyed said business was
getting better. Thirty-six percent said business was getting
better, up from 28% last month.
The new orders index jumped to 19.8 from 5.0, while the shipments
index rose to 17.8 from 12.4. Unfilled orders rose to 7.2, the
first positive reading in eight months. Employment rose to 6.3 from
3.4.
The prices paid index dropped marginally to 25.9 from 26.5. The
prices received index fell to a two-year low of 3 from 12,
indicating little pricing power.
"The data still suggest that inflation pressures have moderated
from the sharp acceleration in 2004," said analysts for Action
Economics.
In a special question, 76% of firms expect energy prices to rise by
an average of 5.4% for the remainder of 2005. In addition, 65% said
raw materials prices will rise, by an average of 2.8%, while 52%
said intermediate goods prices will rise, by an average of
2%.
Looking ahead, the six-month outlook rose to 33.4 from 15.3, the
highest since December. Over the next six months, 36.7% of firms
expect their own pricing power to improve.
In other reports released Thursday, the Conference Board said the
index of leading economic indicators increased 0.1% in July,
suggesting moderate growth.
The Labor Department reported weekly initial jobless claims
increased by 6,000 to 316,000 last week, with the four-week average
rising by 2,750 to 312,750.
In short.. US market - Economic activity is up, but moderate
growth in the coming 6 months expected.
