Conference Board News Release (06/18/15)

The Conference Board Leading Economic Index for the U.S. increased 0.7% in May to 123.1, following a 0.7% increase in April.

“The U.S. LEI increased sharply again in May, confirming the outlook for more economic expansion in the second half of the year after what looks to be a much weaker first half,” says Ataman Ozyildirim, director, business cycles and growth research, at the Conference Board. “While residential construction and consumer expectations support the more positive outlook, industrial production and new orders in manufacturing are painting a somewhat more mixed picture.”

The Conference Board Coincident Economic Index for the U.S. increased 0.1% in May to 112.1, following a 0.2% increase in April. The Conference Board Lagging Economic Index for the U.S. increased 0.2% in May to 117.0, following a 0.2% increase in April.

Wall Street Journal (06/18/15) Eric Morath; Jeffrey Sparshott

Consumer prices posted the largest monthly increase in May since February 2013, a signal of modest inflation. The consumer-price index increased a seasonally adjusted 0.4% in May from April, according to the U.S. Department of Labor. Higher gasoline prices drove the overall index higher. Excluding the energy and food categories, core prices rose 0.1%. Economists polled by the Wall Street Journal had forecast overall prices would rise 0.5% and core prices would increase 0.2%.

Overall prices were unchanged from a year ago, and core prices were up 1.7%.

MarketWatch (06/18/15) Jeffry Bartash

The U.S. Department of Labor reports that the number of people applying for unemployment benefits fell by 12,000 to 267,000 in the week ending June 13, maintaining a 15-year low. Economists polled by MarketWatch had expected claims to total a seasonally adjusted 279,000. Meanwhile, the average of new claims over the past month dropped by 2,000 to 276,750.

Wall Street Journal (06/17/15) Jon Hilsenrath

Despite the winter economic slowdown, the U.S. Federal Reserve has indicated that it is moving forward with interest-rate increases later this year. With the economy now firmer after a winter slump, and stronger than it has been in the last several years, Fed chairman Janet Yellen stated that conditions have reached a point where gradual increases in the target federal-funds rate are warranted.

Officials want to be sure that inflation is moving up and that there is more progress on jobs, and only gradually raising interest rates allows for that security. The Fed suggested that while it expects to start raising short-term interest rates before the end of 2015, it may only raise those rates once this year, and only by a quarter percentage point, contradicting earlier forecasts. The central bank, in economic projections supplementing the Fed’s statement, also revised down its growth estimate for 2015. While economic output was thought to be expanding by 2.3% to 2.7% in March, the latest revised estimate puts output growth at 1.8% to 2.0%.