The latest leading indicator readings show that at least some improvement is beginning to develop, according to the Conference Board.

The Conference Board also reports that the Coincident Index rose 0.1 percent in November after no change in October. The lagging index declined 0.2 percent in November after no change in October.

This month's gain in the leading index is the largest since December of last year. With this increase, the index has now recovered its losses since May 2002, and is nearly 3.6 percent above its most recent trough in March 2001.

Strength in the financial sector -- coupled with a rebound in consumer expectations and a decline in unemployment insurance claims -- contributed to the increase in the leading index this month, according to economists.

The coincident index, a measure of current economic activity, increased modestly in November. Despite this increase, the coincident index remains essentially flat since July 2002, reflecting a sluggish recovery from the last recession.

Five of the ten indicators that make up the leading index increased in November. The positive contributors to the index -- beginning with the largest positive contributor -- were stock prices, real money supply, interest rate spread, average weekly initial claims for unemployment insurance (inverted), and index of consumer expectations.

The four negative contributors -- from the largest negative contributor to the smallest -- were vendor performance, building permits, manufacturers' new orders for nondefense capital goods, and manufacturers' new orders for consumer goods and materials. Average weekly manufacturing hours held steady in November.

The leading index now stands at 112.3 (1996=100). Based on revised data, this index increased 0.1 percent in October and decreased 0.4 percent in September. During the six-month span through November, the leading index held steady, with four of the ten components advancing (diffusion index, six-month span equals 40 percent).

Three of the four indicators that make up the coincident index increased in November. The positive contributors to the index -- beginning with the largest positive contributor -- were personal income less transfer payments, manufacturing and trade sales, and industrial production. Employees on nonagricultural payrolls decreased in November.

The coincident index now stands at 115.0 (1996=100). Based on revised data, this index held steady in October and decreased 0.1 percent in September. During the six-month period through November, the coincident index increased 0.4 percent.

The lagging index decreased 0.2 percent to 99.7 (1996=100) in November. Four of the seven components declined in November. The negative contributors to the index -- beginning with the largest negative contributor -- were average prime rate charged by banks, commercial and industrial loans outstanding, average duration of unemployment, and change in CPI for services. The positive contributors to the index were change in labor cost per unit of output and ratio of manufacturing and trade inventories to sales. Ratio of consumer installment credit to personal income held steady in November. Based on revised data, the lagging index held steady in October and decreased 0.5 percent in September.