After showing the first decrease in almost a year in the previous month, the Conference Board released a report on Friday showing its U.S. leading economic index rose by slightly more than expected in the month of February.
The Conference Board said its leading economic index increased by 0.3 percent in February after falling by a revised 0.5 percent in January.
Economists had expected the leading economic index to edge up by 0.2 percent compared to the 0.3 percent drop originally reported for the previous month.
However, Ataman Ozyildirim, Senior Director of Economic Research at the Conference Board, noted, “The latest results do not reflect the full impact of the Russian invasion of Ukraine, which could lower the trajectory for the US LEI and signal slower-than-anticipated economic growth in the first half of the year.”
“The global economic impact of the war on supply chains and soaring energy, food, and metals prices-coupled with rising interest rates, existing labor shortages, and high inflation-all pose headwinds to US economic growth,” he added.
The increase by the leading index reflected positive contributions from seven of the ten indicators, including the interest rate spread, average weekly manufacturing hours, and average weekly initial jobless claims.
The report also showed the coincident economic index climbed by 0.4 percent in February after rising by 0.3 percent in January.
Meanwhile, the lagging economic index remained unchanged in February following a 0.7 percent advance in the previous month.
“While the Omicron wave and its economic impact waned in recent months, the potential for new COVID-19 variants remains,” said Ozyildirim.
He added, “Amid these risks, The Conference Board revised its growth projection for the US economy down to 3.0 percent year-over-year GDP growth in 2022- still well above the pre-pandemic growth rate, which averaged around 2 percent.”