A measure of future economic activity in the United States has increased for a fifth straight month, a sign the recovery could be gaining traction.
The Conference Board reported that its Leading Economic Index (LEI) climbed to 112.4 in November, up 1.1 percent. With a collective gain of 1 percent for October and September, the index has increased
2.2 percent over the past six months.
A measure of current economic performance edge up a tenth of a percent in November, while a measure of past performance slipped a tenth. The indexes suggest the economic expansion that began in mid-2009 will continue and could pick up slightly in the near term.
“November’s sharp increase in the LEI, the fifth consecutive gain, is an early sign that the expansion is gaining momentum and spreading,” said Ataman Ozyildirim, an economist with the Conference Board, a business research and membership group.
“Nearly all components rose in November. Continuing strength in financial indicators is now joined by gains in manufacturing and consumer expectations, but housing remains weak,” Ozyildirim said.
Ken Goldstein, another economist with the Conference Board put it this way: “The U.S. economy is showing some sparks of life in late 2010. Overall, the indicators point to a mild pickup after a slow winter. Looking further out, possible clouds on the medium-term horizon include weakness in housing and employment.”
For November, nine of 10 components of the LEI increased, including average weekly manufacturing hours, consumer expectations, interest rate spread, new orders for consumer and capital goods, real money supply, stock prices and vendor performance. Moreover, average weekly initial claims for unemployment insurance were down. The only retreating component was building permits.
The Coincident Economic Index (CEI), a measure of current conditions, advanced to 101.7, edging up a tenth of a percent. The CEI has climbed four-tenths of a percent over the past six months.
For November, all four components of the index increased: employment, industrial production, manufacturing and trade sales and personal income less transfer payments.
The Lagging Economic Index (LAG), a measure of past performance, slipped to 108.6, down a tenth of a percent. The index was unchanged in October and up six-tenths of a percent in September. For November, three of seven components fell, while two increased and two held steady.