Index forecasts U.S. growth
A monthly index forecasting economic performance in the United States edged up in December as indicators continue to portend growth.
The Conference Board Leading Economic Index rose a tenth of a percent to 99.4. Counting the latest gain, the index has increased 3.4 percent over the past six months. Separate measures of current and past economic performance also increased in December.
“The latest report suggests steady growth this spring, but some uncertainties remain,” said Ken Goldstein, an economist for the Conference Board, a business research and networking association.
“Business caution and concern about unresolved federal budget battles persist, but the better-than-expected holiday season might point to sustained stronger demand and could put the U.S. on a faster growth track for 2014,” Goldstein said.
Ataman Ozyildirim, another economist with the Conference Board, said financial components lifted the index in December, but consumer expectations for business conditions as well as residential construction continue to pose risks.
For December, five of 10 indicators tracked in the Leading Economic Index advanced: interest rate spread, leading credit and new orders indexes, new orders for consumer goods and stock prices. Four indicators retreated, including building permits, consumer expectations for business conditions, and new orders for capital goods. An increase in average weekly claims for unemployment insurance also pulled down the index. Average weekly manufacturing hours remained unchanged.
The Coincident Economic Index, a measure of current performance, increased two-tenths of a percent to 108.1 in December. The index has gained 1.3 percent over the past six months.
For December, all four indicators of the index increased: industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index, a measure of past performance, advanced three-tenths of a percent to 121.2. The index has increased six-tenths of a percent over the past three months.
For December, just two of seven components of the index advanced:
commercial and industrial financing and consumer credit. Inventories and labor costs retreated even as an increase in the average duration of unemployment also pulled the index down. The average prime rate charged by banks and the cost of services held steady.