Leading Economic Index increased in January

Leading Economic Index increased in January

The Leading Economic Index® for Brazil (LEI), released by FGV IBRE in partnership with The Conference Board (TCB), increased 0.4 percent in January to 120.1, the highest index level on record. January’s increase was fueled by positive contributions from five of the eight LEI components, with the largest positive contribution coming from the Industry and Service Sector Expectations Index.

The Coincident Economic Index for Brazil (CEI, FGV TCB), which measures current economic conditions, increased 0.2 percent to 104.7, in the same period.

“The January results for the LEI and CEI suggest the economic expansion will continue, despite other indicators suggesting a slowdown”, according to Paulo Picchetti at FGV IBRE. “Low interest rates, and the moderate labor market improvements should support economic growth in the near term”, said Picchetti.

The Leading Economic Index aggregates eight components that measure economic activity in Brazil. Each of them individually has proved efficient in anticipating economic trends. Aggregating individual indicators into a composite index filters out so-called "noise," smoothing out the volatility of individual components, and revealing the underlying economic trend.

About the Leading Economic Index (LEI)
FGV IBRE and The Conference Board launched the Leading Economic Index (LEI) for Brazil in July 2013. With a series dating back to 1996, the LEI would have anticipated, reliably, all four recessions identified by the Brazilian Dating Committee of Economic Cycles (CODACE) during this period. This indicator allows Brazil to directly compare its business cycles with 11 other countries and regions already covered by The Conference Board: China, the United States, the Eurozone, Australia, France, Germany, Japan, Mexico, Korea, Spain and the UK.
The eight components of the Brazilian LEI are:

Pre-fixed DI swap reference rate – 1 year (Source: Brazil's Central Bank)
Ibovespa Stock Market Index (Source: BOVESPA - São Paulo Stock Exchange)
Expectations index of the Manufacturing Survey (Source: FGV IBRE)
Expectations index of the Services Survey (Source: FGV IBRE)
Expectations index of the Consumer Survey (Source: FGV IBRE)
Durable consumer goods - physical production index (Source: IBGE)
Terms of trade index (Source: FUNCEX)
Volume of Exports index (Source: FUNCEX)


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Created in 1944, FGV is a Brazilian private higher education institution, think tank and producer of statistics, with a mission "to foster Brazil’s socioeconomic development." The Brazilian Institute of Economics (IBRE) is FGV´s arm with the mission to produce and disseminate high-quality economic statistics and studies that are relevant to improve policies and private action in Brazil. www.fgv.br/ibre