The U.S. economic index increased higher than anticipated in August, rising 0.9% and beating economists' projections of a 0.6% rise and following a 0.8% rise in July, according to The Conference Board.
The increase by the index reflected positive contributions by eight out of 10 indicators, including average weekly jobless claims which increased by 16,000 to 351,000.
“Whether it’s time to begin to… taper the asset purchases or not I think will be dependent on what we see between now and [November] in the data,” The Conference Board's @JoeMinarik says. “We could have developments in the global economy that would throw us off our stride.” pic.twitter.com/Lpcyh1DVkY
— Yahoo Finance (@YahooFinance)
Based on its latest Leading Economic Index, the Conference Board expects U.S. real GDP growth "to reach nearly +6.0% y/y for 2021, before easing to a still-robust +4.0% y/y for 2022." That's consistent with the FOMC's latest real GDP projections of +5.9% ('21) and +3.8% ('22). pic.twitter.com/Ado27CJ1o0
— Jeoff Hall (@JeoffHall)
"We expect claims to return to their downward path in the weeks ahead, but the data will be more uneven as claims get closer to pre-pandemic levels," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York.
The Coincident Economic Index increased by 0.2% to 150.9, following a 0.6% increase in July and a 0.5% increase in June. The Lagging Economic Index increased by 0.1% to 106.3, following a 0.5% increase in July and a 0.1% increase in June.
"The U.S. LEI rose sharply in August and remains on a rapidly rising trajectory," said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board.
"While the Delta variant—alongside rising inflation fears—could create headwinds for labor markets and the consumer spending outlook in the near term, the trend in the LEI is consistent with robust economic growth in the remainder of the year.
"Real GDP growth for 2021 is expected to reach nearly 6.0 percent year-over-year, before easing to a still-robust 4.0 percent for 2022."
