Consumer goods and materials
The Conference Board LEI (Leading Economic Index) uses new orders for consumer goods and materials as an important constituent. New orders in any sector give an idea of demand trends. Increasing demand for goods increases production, wages, and the number of hours worked, which benefits the economy. This sector includes companies such as Procter & Gamble (PG), Coca-Cola (KO) and Walmart (WMT).
Recent data release
New orders for consumer goods and materials rose in August, to 136,033 from a revised reading of 135,788 in July. New orders make up 8.2% of the LEI. In August, the net contribution of new orders was 0.01, or 1%.
Performance of the sector
The Vanguard Consumer Staples ETF (VDC) and the SPDR Consumer Staples Select Sector ETF (XLP) are the two most traded funds in this sector. Whereas companies in this sector had a mixed performance last month due to geopolitical uncertainties, year-to-date, their performance has been positive. More orders are encouraging for the industry and likely to have a positive effect in the near term.