An index forecasting economic conditions in the United States has increased, signaling moderate growth in the months ahead.
The Conference Board Leading Economic Indicator rose six-tenths of a percent to 123.9 in April. Separate measures of current and past economic performance also increased.
“The U.S. LEI picked up sharply in April with all components except consumer expectations contributing to the rebound from an essentially flat first quarter. Despite a slow start in 2016, labor market and financial indicators and housing permits all point to a moderate growth trend continuing in 2016,” said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership association.
The Leading Economic Index has advanced six-tenths of a percent over the past six months, less than half the gain for the six months before that. Strengths among the leading indicators remain more widespread than weaknesses, however.
Gross domestic product, the broad measure of goods and services produced in the country, rose at an annual rate of a half percent in the first quarter of 2016 after increasing 1.4 percent in the fourth quarter of 2015.
For April, nine of 10 components of the Leading Economic Indicator advanced, including average weekly manufacturing hours, building permits, interest rate spread, a leading credit index, a new orders index, new orders for both capital and consumer goods and stock prices. A decrease in average initial claims of unemployment benefits also bolstered the index. Consumer expectations for business conditions retreated.
The Coincident Economic Index, a measure of current performance, rose three-tenths of a percent to 113.6. The index has increased eight-tenths of a percent over the past six months.
For April, all four components of the index advanced — industrial production, payrolls, personal income and sales.
The Lagging Economic Index, a measure of past performance, increased three-tenths of a percent to 121.5. The index has gained 1.2 percent over the past three months.
For April, four of seven components of the index increased, including commercial and industrial financing, consumer financing and inventories. A decrease in the average duration of unemployment also buoyed the index Labor costs declined, while the cost of services and average prime rate charged by banks held steady.