Suggesting that a pickup in domestic growth is now more likely than a few months ago, the Conference Board released a report on Thursday showing that its index of leading U.S. economic indicators rose by slightly more than expected in the month of December.
The Conference Board said its leading economic index rose by 0.5 percent in December after coming in unchanged in November. Economists had expected the index to increase by about 0.4 percent.
Ataman Ozyildirim, an economist at the Conference Board, said, “The U.S. LEI rose sharply in December, led by a large improvement in initial claims for unemployment insurance and positive contributions from the interest rate spread and the Leading Credit Index.”
“The increase in the LEI brought its six-month growth rate well above zero, with roughly two-thirds of the components advancing in the last six months,” he added.
The report also showed that the coincident economic index edged up by 0.2 percent in December following a 0.5 percent increase in November.
The modest increase by the coincident economic index reflected positive contributions from all four indicators that make up the index.
Additionally, the Conference Board said the lagging economic index advanced by 0.7 percent in December after rising by 0.3 percent in November.
The increase by the lagging index reflected positive contributions from commercial and industrial loans outstanding, the average duration of unemployment, the ratio of consumer installment credit to personal income, the change in CPI for services, and the ratio of manufacturing and trade inventories to sales.
Ken Goldstein, an economist at the Conference Board said, “Housing, which has long been a drag, has turned into a positive for growth, and will help improve consumer balance sheets and strengthen consumption.”
“However, for growth to gain more traction we also need to see better performance on new orders and an acceleration in capital spending,” he added.
by RTT Staff Writer
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