The Conference Board's Index of Leading Indicators (LEI) increased 0.8% in May after a 0.4% drop in April. The year-over-year change of the LEI in the second quarter (April-May average) moved up 5.00% after advancing 5.5% in the prior quarter. The recent peak of the year-to-year change of the LEI was 10% in the first quarter of 2010. The year-to-year change of the index since the early months of 2010 has maintained a decelerating trend, implying that only a mildly positive pace of economic growth is likely in the quarters ahead.

Of the ten components of the index, positive contributions were from initial jobless claims, orders of consumer and capital goods, stock prices, building permits, real money supply, interest rate spread, and consumer expectations. The manufacturing workweek held steady and vendor deliveries declined.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

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