US LEI: Strength in underlying components suggests economic growth should continue - Wells Fargo

The Leading Economic Index (LEI) continued its climb in August, gaining 0.4 percent over the month. Analysts from Wells Fargo,  point out that August data marks the 12th consecutive month in which the index increased, signaling modest growth ahead.

Key Quotes: 

“The LEI increased 0.4 percent in August, following a 0.3 percent increase in July and a 0.6 percent increase in June. The coincident index was unchanged in August while the lagging index increased 0.3 percent.”

“Seven components contributed positively to the index while initial claims was the only component to negatively impact the headline reading. The effects of the recent hurricanes are slowly creeping into the data.”

“Hurricanes Harvey and Irma will likely slow housing starts in coming months, as resources are redirected toward repairs and rebuilding efforts.”

“The interest rate spread added 0.12 percentage points while consumer expectations contributed 0.11 percentage points. The broad-based strength in the underlying components suggests that the current pace of economic growth should continue.”