A monthly index forecasting economic conditions in the United States has increased, but still suggests a recession will continue.
The Conference Board reported its Leading Economic Index (LEI) rose 2.8 percent to 99.8 in May. The increase follows a total decrease of 13.6 percent in April and March.
A separate measure of current performance increased in May, while a measure of past performance decreased.
Ataman Ozyilidirim, senior director of economic research at the Conference Board, said a drop in unemployment claims accounted for about two-thirds of the increase in the LEI. Other indicators also bolstered the index.
Overall, though, the index still reflects weak economic conditions, Ozyilidirim said. “The breadth and depth of the decline in the LEI between February and April suggest the economy at large will remain in recession territory in the near term.”
The LEI dropped 10.6 percent over the past six months after no change in the six-month span before that.
Gross domestic product, the broad measure of goods and services produced in the country, contracted at an annual rate of 5 percent in the first quarter after expanding 2.1 percent in the fourth quarter.
For May, seven of 10 indicators of the LEI advanced, including average manufacturing hours, building permits, interest rate spread, new orders for capital and consumer goods and stock prices. A decrease in average weekly initial claims for unemployment insurance also buoyed the index. Consumer expectations and new orders and leading credit indexes retreated.
The Coincident Economic Index, a measure of current conditions, rose 1.1 percent to 95.3. The index declined 11.1 percent over the past six months.
For May, industrial production and payrolls increased. Income and sales decreased.
The Lagging Economic Index, a measure of past conditions, decreased 1.9 percent to 111.4. The index has increased 2.2 percent over the past three months.
For May, consumer debt and inventories advanced. Commercial and industrial financing and the cost of labor and services retreated. An increase in the average duration of unemployment also pulled down the index. The average prime rate charged by banks held steady.