A monthly index forecasting economic conditions in the United States continues to increase, signaling growth despite some signs to the contrary.
The Conference Board reported that its Leading Economic Index (LEI) climbed to 95.7 in March, rising three-tenths of a percent over the previous month and 2.7 percent over the previous six months.
Separate measures of current and past economic conditions also advanced in March. Considered together, the latest results suggest the U.S. economy will continue to expand at a moderate pace in the near term.
“Despite relatively weak data on jobs, home building and output in the past month or two, the indicators signal continued economic momentum,” said Ken Goldstein, an economist with the Conference Board, a business research and membership group. “We expect a gradual improvement in growth past the summer months.”
Ataman Ozyildirim, another economist with the Conference Board, said the LEI has increased for six straight months, pointing to “a more positive outlook” despite subdued consumer expectations and weakness in new orders for manufactured goods.
Over the six-month period ending in March, the LEI has increased 2.7 percent, faster than the 0.5 percent decline in the index in the previous six-month period. Meanwhile, strength among the leading indicators of the index have become more widespread.
For March, seven of 10 indicators of the LEI advanced, including building permits, interest rate spread, a leading credit index, new orders for manufactured consumer and capital goods and stock prices. Moreover, average weekly claims for unemployment insurance were down.
Retreating indicators included average weekly manufacturing hours, consumer expectations for business conditions and a new orders index.
The Coincident Economic Index (CEI), a measure of current conditions, rose two-tenths of a percent to 104.2 in March. The CEI has gained a half a percentage point in the past three months and 2 percent in the past six months.
For March, three of four indicators of the CEI advanced: nonfarm payrolls, personal income and sales. An index tracking industrial production held steady.
The Lagging Economic Index (LAG), a measure of past performance, climbed three-tenths of a percent to 114.4 in March. the LAG has gained 1 percent over the past three months.
For March, four of seven components of the LAG advanced: consumer credit, inventories and labor costs. What’s more, the average duration of unemployment was down. Commercial and industrial financing declined, while the average prime interest rate and price of services held steady.