An index forecasting economic performance in the United States has increased on more upbeat expectations for improving conditions, a sign growth likely will continue.
The Conference Board Leading Economic Index rose a half a percent to 124.6 in December even as separate measures of current and past conditions also increased.
The indexes suggest growth will continue at a modest pace and could even accelerate in the early months of the year, said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership association.
“December’s large gain was mainly driven by improving sentiment about the outlook and suggests the business cycle still showed strong momentum in the final months of 2016,” Ozyildirim said.
The Leading Economic Index has advanced 1.4 percent over the past six months, faster than the two-tenths of a percent gain over the six months before that. In addition, strengths among leading indicators used in the index have become more widespread.
By comparison, gross domestic product — the broad measure of goods and services produced in the country — grew at an annual rate of 3.5 percent in the third quarter of 2016 and 1.4 percent in the second quarter.
For December, six of 10 indicators of the Leading Economic Index advanced: consumer expectations, interest rate spread, a leading credit index, new orders for consumer goods, a new orders index and stock prices. New orders for capital goods retreated. An increase in initial claims for unemployment benefits also pulled down the index. Building permits and manufacturing hours held steady.
The Coincident Economic Index, a measure of current conditions, rose three-tenths of a percent to 114.3. The index has increased 1 percent over the past six months.
For December, all four of the indicators of the index advanced: industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index, a measure of past performance, rose three-tenths of a percent to 123.4. The index has increased nine-tenths of a percent over the past three months.
For December, four of seven indicators of the index advanced: the average prime interest rate charged by banks, consumer credit and commercial and industrial financing. A decrease in the average duration of unemployment also bolstered the index. Labor costs declined. Inventories and the cost of services held steady.