A measure of the health of the nation’s economy and where it's headed moved slightly higher, but one analyst says the rate of growth remains unimpressive.
The Conference Board said on Friday its Leading Economic Index increased 0.1% to 123.7, following no change in July, and a 0.6% increase in June.
“The U.S. LEI suggests economic growth will remain moderate into the new year, with little reason to expect growth to pick up substantially,” said Ataman Ozyildirim, director of business cycles and growth research at the private research group. “Average working hours and new orders in manufacturing have been weak, pointing to more slow growth in the industrial sector. However, employment, personal income and manufacturing and trade sales have all been rising, helping to offset the weakness in industrial production in recent months.”
The index is used to gauge where the economy is headed in the next three to six months. It is made up of 10 components, including stock prices, manufacturing levels and home construction.
The group’s Coincident Economic Index, which measures current economic activity, increased 0.1% in August following a 0.4% gain in July and a 0.1% improvement in June.
The Lagging Economic Index, which measures U.S. economic activity of previous months, increased 0.2% in August, following a 0.3 percent hike in July, and a 0.9% jump in June.
The report comes as one analyst describes U.S. economic growth as remaining unimpressive.
“Given the pedestrian rate of economic growth, recent bloating of inventories, the strong U.S. dollar, and the plunge in energy prices, freight volume growth has slowed significantly in 2015,” said John Larkin, Stifel Transportation and Logistics Research Group’s managing director, following FTR’s annual Transportation Conference this week in Indianapolis. “In addition, fewer supply chain disruptions combined with reduced demand have created a more fluid logistics network in 2015, when compared to 2014.”
However, he said domestic intermodal volumes should continue to grow, partially offset by some international share shift from the West Coast to the East Coast.
“Evidence suggests that shippers have pulled market share to the East Coast and there is limited evidence of much of that share reverting back. Truckers, 3PLs and railroads can collaborate to move more domestic freight, in the long-haul, high-density lanes, via rail-based intermodal.”