The Conference Board's US leading indicator index rose by 0.3 percent in November, almost reversing the 0.4 percent decline reported in October, and nowhere near the 0.1 percent decline expected in the Econoday consensus forecast. Over the six-month period between May and November 2024, the LEI dropped 1.6 percent, a smaller decline than the 1.9 percent drop over the six-month period between November 2023 and May 2024.

The Conference Board said a bounce-back in building permits (mainly multi-family housing, and in the Northeast and Midwest), bullish stock market, rise in average manufacturing hours worked, and less applications for first-time jobless drove the LEI's rise.

"Overall, the rise in LEI is a positive sign for future economic activity in the US. The Conference Board currently forecasts US GDP to expand by 2.7% in 2024, but growth to slow to 2.0% in 2025," it predicted.

The Conference Board US Coincident Economic Index was up 0.1 percent in November, same as in October. Overall, the CEI is up 0.6 percent in the six-month period ending in November, higher than its 0.5 percent growth rate over the previous six-month period.

The CEI's components-payroll employment, personal income less transfer payments, manufacturing and trade sales, and industrial production-are included in the data used to determine recessions in the United States."Personal income less transfer payments was the highest positive contributor to CEI, based on estimates for November, followed by payroll employment, and manufacturing and trade sales, all of which offset the third consecutive decline in industrial production," the report said.

The Conference Board US Lagging Economic Index rose 0.3 percent in November, following a 0.1 percent dip in October. The LAG's six-month growth rate contracted by 0.4 percent over the six-month period ending in November, after a 0.6 percent increase for the six-month period from November 2023 to May 2024.

Another modest decline of 0.1 percent is the call.

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.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the index of leading indicators, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly -- and causing potential inflationary pressures. The index of leading indicators is designed to predict turning points in the economy -- such as recessions and recoveries. More specifically, it was designed to lead the index of coincident indicators, also now published by The Conference Board. Investors like to see composite indexes because they tell an easy story, although they are not always as useful as they promise. The majority of the components of the leading indicators have been reported earlier in the month so that the composite index doesn't necessarily reveal new information about the economy. Bond investors tend to be less interested in this index than equity investors. Also, the non-financial media tends to give this index more press than it deserves.