Date of this Version
The Leading Economic Indicator, August 17, 2012
The Leading Economic Indicator – Nebraska (LEI-N) grew by 1.24% during July 2012. The increase in the LEI-N, which predicts economic growth in the state six months in the future, follows two months of decline. Improvement in the indicator during July confirms that the Nebraska economy will continue to grow in late 2012 and early 2013, though growth will be slow. A primary reason for the improvement in the LEI-N was a sharp drop in initial unemployment claims during July, which suggests stability in the Nebraska labor market. Building permits for single-family homes also rose during July, an improving signal for construction activity. A declining U.S. dollar in July also suggests growth in Nebraska export activity. Among other indicator components, manufacturing hours changed little between June and July while airline passenger counts dropped. There also was a decline in business expectations for sales and employment growth, according to the Survey of Nebraska Business. Pessimism among businesses, however, was at odds with progress in the labor and housing markets. This points to the importance of using current economic data as well as business survey results when developing expectations about the economy.