An index forecasting economic performance in the United States has increased, signaling what could be accelerating growth in the months ahead.
The Conference Board reported that its Leading Economic Index rose six-tenths of a percent to 125.5 in January. Separate measures of current and past economic conditions also increased.
“The U.S. Leading Economic Index increased sharply again in January, pointing to a positive economic outlook in the first of the year,” said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership association. “The January gain was broad based among leading indicators. And if this trend continues, the U.S. economy may even accelerate in the near term.”
The Leading Economic Index has increased 1.6 percent over the past six months, a faster pace than the nine-tenths of a percent gain over the six months before that. In addition, strengths among leading indicators have become more widespread, suggesting continued expansion in economic activity with the potential for faster growth.
Gross domestic product, the broad measure of goods and services produced in the country, expanded at an annual rate of 1.9 percent during the fourth quarter of 2016 and 3.5 percent during the third quarter.
For January, eight of 10 components of the Leading Economic Index advanced, including building permits, consumer expectations, interest rate spread, leading credit and new orders indexes, new orders for consumer goods and stock prices. A decrease in initial claims for unemployment benefits also bolstered the index.
New orders for capital goods retreated, while average weekly manufacturing hours held steady.
The Coincident Economic Index, a measure of current conditions, edged up a tenth of a percent to 114.4. The index has increased eight-tenths of a percent over the past six months.
For January, three of four indicators of the index advanced: nonfarm payrolls, personal income and sales. Industrial production retreated.
The Lagging Economic Index, a measure of past conditions, rose three-tenths of a percent to 123.7. The index has increased 1 percent over the past three months.
For January, four of seven indicators of the index advanced, including the average prime rate charged by banks, consumer credit and inventories. A decrease in the average duration of unemployment also bolstered the index.
Commercial and industrial financing and the cost of labor retreated. The cost of services held steady.