This morning the Conference Board released its June report on Composite Indexes of Leading, Coincident, and Lagging Indicators.

The composite index of leading indicators (LEI) increased 0.5 percent in June to an all-time high of 102.9. This was the fifth straight monthly advance for this indicator. Over the past six months, the LEI increased by 2.0 percent with nine of the eleven component indicators rising during that period.

Six of the eleven indicators rose during June. The percentage change in sensitive materials prices outpaced all the other indicators, contributing 0.22 to the 0.50 increase in the composite index. As has been the case in recent months, this indicator actually logged a negative reading. But, June's value was less negative than May's, so the indicator's net change was in the positive direction. Vendor performance, an index of the rate at which suppliers of goods can make delivery to their customers, made a 0.11 contribution. The index of consumer expectations, from the University of Michigan's monthly consumer sentiment survey, contributed 0.09, and the growth in the M2 money supply contributed 0.08. On the negative side, Contracts and Orders for Plant and Equipment, Building Permits, and the Change in Manufacturer's Unfilled Orders in the Durable Goods Industries, all contributed -0.04.

The composite index of coincident indicators (CEI) also increased by 0.5 percent in June. The most-recently-reported values for all four of the component indicators were up for the month. The CEI has either risen or remained unchanged in each of the five most-recent months. Over the six months from December to June, all of the components showed significant increases, and the index rose 1.7 percent.

Surprisingly, the composite index of lagging indicators decreased 0.1 percent in June. The lagging index increased 0.2 percent in both April and May, but it is unchanged since December. For three of the seven component indicators, the most-recently-reported value of the indicator is lower than its value in December. Taken by itself, the composite index of lagging indicators might be cause for some concern. But, the behavior of the LEI and CEI provides conclusive evidence that the economy was expanding during the first half of 1996, and should continue to advance in the coming months.