Index forecasts slow growth ahead in U.S.

A monthly index forecasting economic conditions in the United States continues to signal growth, albeit slow, in coming months.

The Conference Board reported that its Leading Economic Index (LEI) edged up two-tenths of a percent to 123.4 in March. The gain reverses what had been three straight months of declines.

“With the March gain, the U.S. LEI’s six-month growth rate improved slightly, but still points to slow, although not slowing, growth in the coming quarters,” said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership association.

Over the past six months, the LEI has increased seven-tenths of a percent, less than half the 1.5 percent gain over the previous six-month period. Strengths among the components of the index remain balanced with weaknesses.

Gross domestic product, the broad measure of goods and services produced in the country, advanced at an annual rate of 1.4 percent in the fourth quarter of 2015 after increasing 2 percent in the third quarter.

The LEI for March reflected a gain in stock prices offset by a decline in housing permits. “Financial conditions as well as expected improvements in manufacturing should support a modest growth environment in 2016,” Ozyildirim said.

For March, six of 10 indicators of the index increased, including interest rate spread, a leading credit index, new orders for capital and consumer goods, a new orders index and stock prices. Building permits declined, and an increase in initial claims for unemployment benefits also pulled down the index. Average weekly manufacturing hours and consumer expectations for business conditions held steady.

The Coincident Economic Index, a measure of current performance,. remained unchanged at 113.3. The index has increased six-tenths of a percent over the past six months.

For March, three of four indicators advanced: nonfarm payrolls, personal income and sales. Industrial production retreated.

The Lagging Economic Index, a measure of past performance, climbed four-tenths of a percent to 120.9. The index has gained a full point over the past three months.

For March, four of seven indicators increased, including commercial and industrial financing, consumer credit and labor costs. A decrease in the average duration of unemployment also bolstered the index. The cost of services and inventories decreased. The average prime rate charged by banks held steady.