According to the Conference Board, this increase was largely due to stock prices, real money supply, and consumer expectations, but most other components also increased slightly. The Board noted, “It is possible that these two consecutive increases reflect the beginning of an upward trend, thereby ending the flat trend that began in early 2002.”

The increased strength in the leading indicators is shown by a rise in the diffusion indexes, which measure the proportion of the components that are rising. The one- and six-month diffusion indexes are now at or above 50 percent, up from lower levels earlier in the year.

The coincident index, a measure of current economic conditions, increased modestly in May after holding steady in the previous two months.

Publication date: 06/16/2003