Conference Board Leading Economic Index; August 2020

The Conference Board Leading Economic Index® (LEI) for the U.S. Increased in August

Slowing pace of improvement points to weakening growth in final months of 2020

NEW YORK, September 18, 2020…The Conference Board Leading Economic Index® (LEI) for the U.S. increased 1.2 percent in August to 106.5 (2016 = 100), following a 2.0 percent increase in July and a 3.1 percent increase in June.

“While the US LEI increased again in August, the slowing pace of improvement suggests that this summer’s economic rebound may be losing steam heading into the final stretch of 2020,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “Despite the improvement, the LEI remains in recession territory, still 4.7 percent below its February level. Weakening in new orders for capital goods, residential construction, consumers’ outlook, and financial conditions point to increasing downside risks to the economic recovery. Looking ahead to 2021, the LEI suggests that the US economy will start the new year under substantially weakened economic conditions.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.6 percent in August to 100.8 (2016 = 100), following a 1.2 percent increase in July and a 3.9 percent increase in June.

The Conference Board Lagging Economic Index® (LAG) for the U.S. decreased 0.6 percent in August to 107.6 (2016 = 100), following a 0.6 percent decrease in July and a 3.5 percent decrease in June.

About The Conference Board Leading Economic Index® (LEI) for the U.S.
The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The leading, coincident, and lagging economic indexes are essentially composite averages of several individual leading, coincident, or lagging indicators. They are constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component – primarily because they smooth out some of the volatility of individual components.

The ten components of The Conference Board Leading Economic Index® for the U.S. include:

Average weekly hours, manufacturing
Average weekly initial claims for unemployment insurance
Manufacturers’ new orders, consumer goods and materials
ISM® Index of New Orders
Manufacturers’ new orders, nondefense capital goods excluding aircraft orders
Building permits, new private housing units
Stock prices, 500 common stocks
Leading Credit Index™
Interest rate spread, 10-year Treasury bonds less federal funds
Average consumer expectations for business conditions

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National new home permits and starts metrics; August 2020

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Conference Board Employment Trends Index; August 2020

The Conference Board Employment Trends Index™ (ETI) Increased in August

Job Growth Retains Upward Momentum

NEW YORK, September 8, 2020…The Conference Board Employment Trends Index™ (ETI) increased in August, following increases in May, June, and July. The index now stands at 52.55, up from 51.37 (an upward revision) in July. However, the index is down from 109.8 a year ago.

“Despite the rise in new COVID-19 cases at the beginning of the summer, job growth continues to gain momentum: the Employment Trends Index increased for the fourth consecutive month,” said Gad Levanon, Head of The Conference Board Labor Markets Institute. “Over the coming months, job growth will persist as industries impacted by social distancing such as travel, hotels, restaurants, and personal care will continue to recover. However, another wave of infections this fall would limit the expansion of the US labor market.”

August’s increase was fueled by positive contributions from six of the eight components. From the largest positive contributor to the smallest, the components were: Initial Claims for Unemployment Insurance; the Number of Employees Hired by the Temporary-Help Industry; the Ratio of Involuntarily Part-time to All Part-time Workers; Percentage of Firms With Positions Not Able to Fill Right Now; Job Openings; and Industrial Production.

The Employment Trends Index aggregates eight labor market indicators, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly.

The eight labor market indicators aggregated into the Employment Trends Index include:
 Percentage of Respondents Who Say They Find “Jobs Hard to Get” (The Conference Board Consumer Confidence Survey®)
 Initial Claims for Unemployment Insurance (U.S. Department of Labor)
 Percentage of Firms With Positions Not Able to Fill Right Now (© National Federation of Independent Business Research Foundation)
 Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
 Ratio of Involuntarily Part-time to All Part-time Workers (BLS)
 Job Openings (BLS)**
 Industrial Production (Federal Reserve Board)*
 Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)**
*Statistical imputation for the recent month
**Statistical imputation for two most recent months

Please note that on September 3, 2020, the Department of Labor (DOL) changed the way it calculates seasonal adjustment factors for national initial claims and continued claims data. The revised seasonal factors are calculated as additive factors as opposed to multiplicative factors. See details: https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20201671.pdf. Starting this September the Bureau of Labor Statistics’ staff, who provide the seasonal adjustment factors, specified these series as additive.

The Conference Board is currently using official data published by DOL as an input to calculate the Employment Trends Index (ETI) – namely, the initial unemployment claims series. The impact on the ETI from the differences in the historical values of the initial claims component of the ETI under the alternative seasonal adjustment methodologies were minimal. Seasonal adjustment models and factors will be reviewed at the beginning of next calendar year, when prior years of ETI data undergo an annual benchmark revision. If changes for the input data are needed, they will be reviewed and implemented.

The Conference Board publishes the Employment Trends Index monthly, at 10 a.m. ET, on the Monday that follows each Friday release of the Bureau of Labor Statistics Employment Situation report. The technical notes to this series are available on The Conference Board website: http://www.conference-board.org/data/eti.cfm.

About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. http://www.conference-board.org.

Media Contact
Joseph DiBlasi
joseph.diblasi@conference-board.org

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Conference Board Consumer Confidence Index; August 2020

The Conference Board Consumer Confidence Index Decreased in August

New York, August 25, 2020…The Conference Board Consumer Confidence Index® decreased in August, after declining in July. The Index now stands at 84.8 (1985=100), down from 91.7 in July. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – decreased sharply from 95.9 to 84.2. The Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – declined from 88.9 in July to 85.2 this month.

The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was August 14.

“Consumer Confidence declined in August for the second consecutive month,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The Present Situation Index decreased sharply, with consumers stating that both business and employment conditions had deteriorated over the past month. Consumers’ optimism about the short-term outlook, and their financial prospects, also declined and continues on a downward path. Consumer spending has rebounded in recent months but increasing concerns amongst consumers about the economic outlook and their financial well-being will likely cause spending to cool in the months ahead.”

Consumers’ assessment of present-day conditions receded in August. The percentage of consumers claiming business conditions are “good” declined from 17.5 percent to 16.4 percent, while those claiming business conditions are “bad” increased from 38.9 percent to 43.6 percent. Consumers’ appraisal of the job market was also less favorable. The percentage of consumers saying jobs are “plentiful” declined from 22.3 percent to 21.5 percent, while those claiming jobs are “hard to get” increased from 20.1 percent to 25.2 percent.

Consumers were also more pessimistic about the short-term outlook. The percentage of consumers expecting business conditions will improve over the next six months declined from 31.6 percent to 29.9 percent, while those expecting business conditions will worsen increased slightly from 20.2 percent to 20.5 percent. Consumers’ outlook for the labor market was also less positive. The proportion expecting more jobs in the months ahead declined from 29.6 percent to 29.1 percent, while those anticipating fewer jobs increased from 21.3 percent to 21.9 percent. Regarding their short-term income prospects, the percentage of consumers expecting an increase declined from 14.8 percent to 12.7 percent, while the proportion expecting a decrease rose from 15.8 percent to 16.6 percent.

Source: August 2020 Consumer Confidence Survey®
The Conference Board / Release #7026

The Conference Board publishes the Consumer Confidence Index® at 10 a.m. ET on the last Tuesday of every month. Subscription information and the technical notes to this series are available on The Conference Board website: https://www.conference-board.org/data/consumerdata.cfm.

About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. http://www.conference-board.org.

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National new home sales metrics; July 2020

Click to access newressales.pdf

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Conference Board Leading Economic Index; July 2020

The Conference Board Leading Economic Index® (LEI) for the U.S. Increased in July

Despite improvement, pace of economic growth will likely weaken in final months of 2020

NEW YORK, August 20, 2020…The Conference Board Leading Economic Index® (LEI) for the U.S. increased 1.4 percent in July to 104.4 (2016 = 100), following a 3.0 percent increase in June and a 3.1 percent increase in May.

“The US LEI increased for the third consecutive month in July, albeit at a slower pace than the sharp increases in the previous two months,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “Despite the recent gains in the LEI, which remain fairly broad-based, the initial post-pandemic recovery appears to be losing steam. The LEI suggests that the pace of economic growth will weaken substantially during the final months of 2020.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 1.2 percent in July to 99.2 (2016 = 100), following a 2.9 percent increase in June and a 2.4 percent increase in May.

The Conference Board Lagging Economic Index® (LAG) for the U.S. decreased 1.0 percent in July to 109.2 (2016 = 100), following a 2.3 percent decline in both June and in May.

About The Conference Board Leading Economic Index® (LEI) for the U.S.
The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The leading, coincident, and lagging economic indexes are essentially composite averages of several individual leading, coincident, or lagging indicators. They are constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component – primarily because they smooth out some of the volatility of individual components.

The ten components of The Conference Board Leading Economic Index® for the U.S. include:

Average weekly hours, manufacturing
Average weekly initial claims for unemployment insurance
Manufacturers’ new orders, consumer goods and materials
ISM® Index of New Orders
Manufacturers’ new orders, nondefense capital goods excluding aircraft orders
Building permits, new private housing units
Stock prices, 500 common stocks
Leading Credit Index™
Interest rate spread, 10-year Treasury bonds less federal funds
Average consumer expectations for business conditions

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National new home sales; July 2020

Click to access newresconst.pdf

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Conference Board CEO confidence index; 3Q/20

New York, NY, August 13, 2020…The Conference Board Measure of CEO Confidence™ in collaboration with The Business Council rose slightly in the third quarter. The measure saw a one-point uptick, moving from 44 in the second quarter to 45 in the third quarter. (A reading below 50 points reflects more negative than positive responses.)
The latest Q3 results also reveal that, over the next 12 months, 38 percent of surveyed CEOs expect to reduce their workforce. Moreover, 37 percent say they will trim their capital spending budgets by 10 percent or more. And with uncertain economic conditions likely to persist, more than a third do not foresee increasing employees’ average wages over the next 12 months. Nearly 50 percent say they will increase wages by less than three percent.
“Without substantial containment of COVID-19, widespread uncertainty will continue being the dominant cloud hanging over America’s CEO community,” said Bart van Ark, Chief Economist of The Conference Board. “With more than one third of CEOs planning to make workforce and sizeable capital spending reductions over the next year, the effects on the economy could extend beyond the next 12 months.”
The latest CEO Confidence results reflect a new collaboration with The Business Council, in which The Conference Board surveyed a majority of the Council’s CEOs – all of whom lead top global companies. Also, the survey now gauges CEOs’ expectations about future actions their companies plan on taking in four key areas: capital spending, employment, recruiting, and wages.
“By collaborating with The Conference Board on their CEO Confidence survey, the world’s top CEOs who are members of The Business Council are providing insights on how they are feeling about the economy and the business environment and steps they plan on taking in light of their sentiment,” said Roger W. Ferguson, Jr., Vice Chairman of The Business Council and Trustee of The Conference Board. “The Conference Board’s non-partisan, decades-long track record in conducting renowned surveys makes them an ideal partner for The Business Council, whose mission it is to foster greater understanding of the major opportunities and challenges facing business today.”

Current Conditions
• On the whole, CEOs remain pessimistic about current economic conditions, though to a lesser extent than in the second quarter. Nearly 90 percent say conditions are worse compared to six months ago, down from 100 percent last quarter. Conversely, just 8 percent say general economic conditions are better.

• CEOs also continue to feel pessimistic about conditions in their own industries, albeit less so. Currently, about 76 percent say conditions are worse compared to six months ago, down from 82 percent last quarter. About 17 percent of CEOs say conditions are better in their own industries, up from 10 percent last quarter.

Future Conditions
• While sentiment about present-day conditions modestly improved, expectations about the short-term outlook have retreated. Now, 62 percent expect economic conditions will improve over the next six months, down from 71 percent last quarter. Moreover, nearly 17 percent expect economic conditions will worsen, up slightly from 16 percent in Q2.

• CEOs’ expectations regarding short-term prospects in their own industries were somewhat more positive than their expectations for the overall economy. Now, 60 percent of CEOs anticipate an improvement in conditions, down from 69 percent last quarter. Those expecting conditions will worsen in the short term, however, decreased to 17 percent from 22 percent in the previous quarter.

Capital Spending, Employment, Recruiting, and Wages
The survey also gauged CEOs’ expectations about four key actions their companies plan on taking over the next 12 months.

• Capital Spending: 37 percent say they will trim their budgets by 10 percent or more over the next 12 months. An additional 18 percent say they anticipate reducing their capital spending plans by less than 10 percent.

• Employment: Looking ahead over the next 12 months, 38 percent of CEOs expect to reduce their workforce.

• Hiring Qualified People: Nearly two-thirds anticipate little, if any, problems in attracting qualified personnel.

• Wages: Nearly 50 percent say they will increase wages by less than three percent.

Source: CEO Confidence Survey Third Quarter 2020 / The Conference Board
The CEO Confidence survey was fielded from July 15th through July 31st.

Media Contact
Joseph.DiBlasi@conference-board.org

About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. http://www.conference-board.org

About The Business Council
The Business Council is a forum for the CEOs of the world’s largest multinational corporations across all industry sectors. Members gather several times each year to share best practices, network and engage in intellectually provocative, enlightening discussions with peers and thought-leaders in business, government, academia, science, technology and other disciplines. Through the medium of discussion, the Council seeks to foster greater understanding of the ma

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CNBC small business confidence index; July 2020

survey

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Conference Board Employment Trends Index; July 2020

The Conference Board Employment Trends Index™ (ETI) Increased in July

Employment growth likely to slow in the coming months

NEW YORK, August 10, 2020…The Conference Board Employment Trends Index™ (ETI) increased in July, following increases in May and June. The index now stands at 50.89, up from 49.46 (an upward revision) in June. However, the index is still down 53.8 percent from a year ago.

“Despite increasing again, the ETI’s July results mark a small improvement compared to the gains made in May and June. The slowing momentum likely resulted from the diminishing impact of the reopening of the economy,” said Gad Levanon, Head of The Conference Board Labor Markets Institute. “This stark deceleration represents a preview of what’s to come: Over the next several months, job growth will significantly put on the brakes, likely causing the national unemployment rate to remain in double-digit territory. Less generous government stimulus will dampen consumer spending. In addition, more waves of downsizing and bankruptcies will spur widespread layoffs—and thus further constrain the expansion of the US workforce.”

July’s increase was fueled by positive contributions from six of the eight components. From the largest positive contributor to the smallest, the components were: the Number of Employees Hired by the Temporary-Help Industry; Industrial Production; the Percentage of Respondents Who Say They Find “Jobs Hard to Get;” Initial Claims for Unemployment Insurance; the Ratio of Involuntarily Part-time to All Part-time Workers; and Job Openings.

The Employment Trends Index aggregates eight labor market indicators, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly.

The eight labor market indicators aggregated into the Employment Trends Index include:
 Percentage of Respondents Who Say They Find “Jobs Hard to Get” (The Conference Board Consumer Confidence Survey®)
 Initial Claims for Unemployment Insurance (U.S. Department of Labor)
 Percentage of Firms With Positions Not Able to Fill Right Now (© National Federation of Independent Business Research Foundation)
 Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
 Ratio of Involuntarily Part-time to All Part-time Workers (BLS)
 Job Openings (BLS)**
 Industrial Production (Federal Reserve Board)*
 Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)**
*Statistical imputation for the recent month
**Statistical imputation for two most recent months

The Conference Board publishes the Employment Trends Index monthly, at 10 a.m. ET, on the Monday that follows each Friday release of the Bureau of Labor Statistics Employment Situation report. The technical notes to this series are available on The Conference Board website: http://www.conference-board.org/data/eti.cfm.

About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. http://www.conference-board.org

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