According to the Conference Board on Friday, its Leading Economic Index for the United States increased 0.8 percent in May to 114.7 (the baseline is 2004, which equals 100). The uptick came on the heels of a decline of 0.4 percent in April for the index, and to some extent can be chalked up to declining energy prices.
Considering the glum economic news in recent weeks, the upswing was a little unexpected. Still, some of the components of the increase were a more optimistic outlook for consumer expectations, interest rate spread and even building permits. Holding things down was a decline in supplier deliveries.
“Overall, despite short-term volatility, the composite indexes still point to expanding economic activity in the coming months,” Ataman Ozyildirim, an economist at the Conference Board, notes in a statement. The organization’s Coincident Economic Index was up as well, though only a scant 0.1 percent to 102.9. The Lagging Economic Index gained 0.3 percent.
Consumers sentiment drops in June
Despite whatever the Conference Board says, American consumers still were feeling grumpy during the first two weeks of June, more in fact than during May, according to the latest Reuter’s/University of Michigan’s Consumer sentiment index released on Friday. The index was down 2.5 points to 71.8, which almost completely reversed the improvement in consumer feeling in May.
The current conditions component dropped by 2.3 points to 79.6, and the expectations component was also down, off 2.7 points to 66.8. Still, overall index sentiment is higher than it was during April and March, when the index hovered below 70. Those were more nervous months than now, apparently, though all bets are off regarding the impact of such looming economic dislocations such as a meltdown in the eurozone.
World shocked to find corruption in China
According to an internal report by the People’s Bank of China accidently (or maybe that was “accidently”) published at its website for a short time last week, as many as 18,000 corrupt Chinese officials at various levels of government managed to remove some $120 billion out of the country over the last 15 years by removing themselves as well, especially to the United States and Australia, but also to places like Burma, Thailand, the Cayman Islands and Bermuda.
Various high-level corruption cases are moving through the Chinese courts these days, such as that of Xu Maiyong, the former vice mayor of the major coastal city of Hangzhou, who was found guilty in May of embezzlement, bribery and abuse of power, and who is now cooling his heels in prison as his death sentence is appealed. Xu’s case made the news, but presumably for every high-profile case, a thousand lower-level officials have their fingers in the till and an eye toward quick exit when the time comes.
Wall Street turned in a mixed day on Friday, with the Dow Jones Industrial Average gaining 42.84 points, or 0.36 percent, while the S&P 500 was up 0.3 percent. The Nasdaq declined 0.28 percent.