Conversely, the coincident economic index (CEI), which measures current economic activity, showed signs of resilience with a 0.2 per cent increase in January 2024 to reach 112.1. This growth mirrored the rate seen in December 2023 and represents a 1 per cent expansion over the six-month period ending in January 2024, slightly down from the 0.8 per cent growth in the previous six months. The CEI's positive trajectory is supported by three of its four components—payroll employment, personal income less transfer payments, and manufacturing and trade sales—all contributing positively to the index in January.
Additionally, TCB's lagging economic index (LAG), which tends to move after changes in the overall economic activity, rose by 0.4 per cent in January 2024 to 118.6, reversing a 0.4 per cent decline seen in December 2023. Over the six months from July to January 2024, the LAG increased by 0.9 per cent, contrasting with a slight 0.1 per cent decrease in the prior six months.
The decline in the LEI during January was primarily attributed to a decrease in hours worked in manufacturing and a negative yield spread, highlighting some of the challenges facing the US economy. Despite the mixed signals from these indices, the data suggests ongoing adjustments in the economy, with certain areas demonstrating growth while others face headwinds.
ALCHEMPro News Desk (DP)
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