Pointing to a slow but continued expansion in U.S. economic activity in the near term, the Conference Board released a report on Thursday showing a modest increase by its index of leading U.S. economic indicators in the month of January.
The Conference Board said its leading economic index edged up by 0.2 percent in January following a 0.5 percent increase in December. Economists had expected the index to increase by about 0.3 percent.
Ken Goldstein, an economist at the Conference Board, said, "The indicators point to an underlying economy that remains relatively sound but sluggish."
"The housing market is now at twice the level reached during its recessionary lows, and will likely continue to improve through the spring, delivering some growth momentum to the labor market and the overall economy," he added. "The biggest risk, however, is the adverse impact of cuts in federal spending."
The increase by the leading index reflected positive contributions from six of the ten indicators that make up the index, including the interest rate spread, stock prices, the Leading Credit Index, average weekly initial jobless claims, building permits, and manufacturers' new orders for consumer goods and materials.
Negative contributions from average consumer expectations for business conditions, average weekly manufacturing hours, the ISM new orders index, and manufacturers' new orders for non-defense capital goods excluding aircraft limited the upside for the index.
The report also showed that the coincident economic index rose by 0.4 percent in January following a 1.0 percent increase in December.
The increase by the coincident index reflected positive contributions from personal income less transfer payments, employees on non-agricultural payrolls, and manufacturing and trade sales.
The Conference Board said the lagging economic index also increased by 0.4 percent in January after edging up by 0.1 percent in December.
Positive contributions from the average duration of unemployment and commercial and industrial loans outstanding led to the increase by the lagging index.
by RTT Staff Writer
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