An index forecasting economic conditions in the United States has climbed even higher, signaling growth in the months ahead.

The Conference Report reported its Leading Economic Index rose 1.3 percent to 114.5 in May. The index moved further above its previous peak of 112 reached in January 2020.

A separate measure of current economic conditions increased, while a measure of past performance decreased.

Ataman Ozyildirim, senior director of economic research at the Conference Board, said the latest readings suggest strong economic growth in the near term.

Gross domestic product, the broad measure of goods and services produced in the country, is forecast to increase at an annual rate of 9 percent in the second quarter, with 6.6 percent year-over-year growth for 2021, Ozyildirim said.

The Leading Economic Index rose 4.9 percent over the past six months, slower than the 9.4 percent gain in the six-month span before that. Strengths among the leading indicators remain widespread, however.

By comparison, GDP increased at an annual rate of 6.4 percent in the first quarter of 2021 and 4.3 percent in the fourth quarter of 2020.

For May, seven of 10 components of the index advanced, including consumer expectations, interest rate spread, leading credit and new orders indexes, new orders for consumer goods and stock prices.  A decrease in average weekly claims for unemployment benefits also bolstered the index.
Building permits and new orders for capital goods retreated. Average weekly manufacturing hours held steady.

The Coincident Economic Index rose four-tenths of a point to 105.1. The index increased 2 percent over the past six months.

For May, all four components of the index advanced — industrial production, nonfarm payrolls, personal income and sales.

The Lagging Economic Index decreased 2.2 percent to 103. The index fell 3.4 percent over the past three months.

For May, two components advanced — the cost of services and inventories. Commercial and industrial financing, consumer dept and labor cost retreated. An increase in the average duration of unemployment also pulled down the index. The average prime rate held steady.