A monthly index forecasting economic conditions in the United States continues to increase, signaling improvement in the months ahead.
The Conference Board reported its Leading Economic Index rose 1.3 percent to 111.6 in March, more than offsetting a revised tenth of a point drop in February. A separate measure of current conditions increased, while a measure of past performance decreased.
“The improvement in the U.S. LEI, with all 10 components contributing positively, suggests economic momentum is increasing in the near term,” said Ataman Ozyildirim, senior director of economic research at the Conference Board.
“The recent trend in the U.S. LEI is consistent with the economy picking up in the coming months, and the Conference Board now projects year-over-year growth could reach 6 percent in 2021.”
The Leading Economic Index rose
3.8 percent over the past six months, slightly less than the 4 percent gain over the six months before that. Strength among the indicators remains widespread
Gross domestic product, the broad measure of goods and services produced in the country, increased at an annual rate of 4.3 percent in the fourth quarter after jumping 33.4 percent in the third quarter.
For March, all 10 of the indicators of the Leading Economic Index advanced, including average weekly manufacturing hours, building permits, consumer expectations, interest rate spread, leading credit and new orders indexes, new orders for capital and consumer goods and stock prices. A decrease in average weekly initial claims for unemployment benefits also bolstered the index.
The Coincident Economic Index, a measure of current conditions, increased six-tenths of a percent to 104. The index has climbed 1.7 percent over the past six months.
For March, all four indicators of the index advanced: industrial production, nonfarm payrolls, personal income and sales.
The Lagging Economic Index, a measure of past performance, slipped a half of a percent to 105.1 The index has decreased 1.15 percent over the past three months.
For March, three of seven indicators advanced: the cost of labor and services as well as inventories. Commercial and industrial financing and consumer credit declined. An increase in the average duration of unemployment also pulled down the index. The average prime rate charged by banks held steady.