Leading index signals continued growth in U.S.

A monthly index forecasting economic performance in the United States continues to signal growth, although concerns persist a European recession could hamper a more robust recovery.

The Conference Board reported that its Leading Economic Indicator (LEI) rose five-tenths of a percent to 118 in November. With a full-point gain over the previous two months, the LEI has advanced 2.8 percent over the past six months.

“The LEI is pointing to continued growth this winter, possibly even gaining momentum by spring,” said Ken Goldstein, an economist with the Conference Board, a business research and membership group.

Goldstein said a number of leading indicators have advanced, including an increase in building permits that suggests a long decline in housing finally has slowed.

“However, this somewhat positive outlook for the domestic economy is at odds with a global economy that appears to be losing steam,” Goldstein added. “In particular, a deeper-than-expected recession in Europe could easily derail the outlook for the U.S. economy.”

For November, seven of 10 indicators of the LEI advanced, including building permits, consumer expectations, the interest rate spread on 10-year treasury bonds, money supply, new orders for capital goods and stock prices. Moreover, average weekly claims for unemployment benefits declined.

Retreating indicators included the average manufacturing workweek, new orders for consumer goods and supplier deliveries.

The Conference Board reported that its Coincidence Economic Index (CEI), a measure of current economic performance, edged up a tenth of a percent to 103.7 in November. The CEI has gained eight-tenths of a percent over the past six months.

For November, three of four components of the CEI advanced: nonfarm payrolls, personal income and sales. Production declined.

The Conference Board Lagging Economic Index, a measure of past economic performance, also edged up a tenth of a percent in November to 110.9.

The LAG has gained eight-tenths of a percent over the past three months.

For November, two of seven components of the index advanced – business loans and labor costs. Two components declined — the price of services and an increase in the average duration of unemployment. The remaining three components held steady — average prime interest rate, consumer credit and inventories.