A monthly index forecasting economic conditions has edged up as short-term prospects remain mostly upbeat.
The Conference Board reported that its Leading Economic Index rose a tenth of a percent to 123.2 in February. Separate measures of current and past economic performance also increased.
“Although the LEI’s six-month growth rate has moderated considerably in recent months, the outlook remains positive with little chance of a downturn in the near future,” said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership association.
With back-to-back declines in December and January, the Leading Economic Index has advanced three-tenths of a percent over the past six months, a fraction of the 2 percent growth over the precious six-month period.
Still, strengths among the leading indicators have remained more widespread than weaknesses. The main sources of weakness include building permits, consumer expectations, new orders and stock prices, Ozyildirim said.
Gross domestic product, the broad measure of goods and services produced in the country, grew at an annual rate of 1 percent during the fourth quarter of 2015.
For February, four of 10 indicators of the index increased, including interest rate spread, a leading credit index and new orders for consumer goods and materials. A decrease in average weekly initial claims for unemployment benefits also bolstered the index. Decreasing indicators including building permits, consumer expectations for business conditions, a new orders index, new orders for capital goods and stock prices. Average weekly manufacturing hours held steady.
The Coincident Economic Index, a measure of current performance, also edged up a tenth of a percent to 113.3. The index has increased nine-tenths of a percent over the past six months.
For February, 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 120.4. The index has increased a half a percent over the past three months.
For February, three of seven components of the index advanced: commercial and industrial loans outstanding and the cost of labor and services. An increase in the average duration of unemployment pulled down the index. The average prime rate charged by banks, consumer credit and inventories all remained unchanged.