A monthly index forecasting economic conditions in the United States continues to rise, signaling growth in the year ahead.
The Conference Board reported that its Leading Economic Indicator advanced three-tenths of a percent to 99.5 in January. The index has increased 3.1 percent over the past six months. Separate measures of current and past economic performance also rose in January.
“The increase in the Leading Economic Index reflects an economy that is expanding moderately, although the pace is somewhat held back by persistent and severe inclement weather in most parts of the country,” said Ken Goldstein, an economist with the Conference Board. “If the economy is going to move on to a faster track in 2014 compared to last year, consumer demand and especially investment will need to pick up significantly from their current trends.”
Ataman Ozyildirim, another economist with the Conference Board, said the index suggests “the economy will remain resilient in the first half of 2014 and underlying economic conditions should continue to improve.”
The Conference Board, a business research and membership association, bases on the Leading Economic Index on 10 indicators. For January, five indicators advanced: the interest rate spread, a leading credit index, new orders for manufactured consumer goods and stock prices. A decline in average weekly initial claims for unemployment insurance also pushed up the index. Four indicators retreated: average weekly manufacturing hours, building permits, consumer expectations for business conditions and a new orders index. New orders for manufactured capital goods held steady.
The Coincident Economic Index, a measure of current performance, edged up a tenth of a percent to 108.1 in January. The index has increased 1.3 percent over the past six months.
For January, three of four indicators of the index advanced: nonfarm payrolls, personal income and sales. Industrial production declined.
The Lagging Economic Index, a measure of past performance, climbed three-tenths of a percent to 121.6 in January. The index has increased seven-tenths of a percent over the past three months.
For January, four of seven indicators of the index advanced: commercial and industrial financing, consumer credit and labor costs. A decrease in the average duration of unemployment also bolstered the index. Three indicators remained unchanged: the average prime interest rate charged by banks, the cost of services and inventories.