Indicating somewhat more positive U.S. economic conditions in early 2012, the Conference Board released a report on Friday showing that its index of leading economic indicators increased for the fourth consecutive month in January.
The Conference Board said its leading economic index rose by 0.4 percent in January following a revised 0.5 percent increase in December. Economists had been expecting the index to increase by 0.5 percent compared to the 0.4 percent increase originally reported for the previous month.
Ataman Ozyildirim, an economist at the Conference Board, said, "This fourth consecutive gain in the LEI reflected fairly widespread strength among its components, pointing to somewhat more positive economic conditions in early 2012."
"The LEI's increase in January was led not only by improving financial and credit indicators, but also rising average workweek in manufacturing," he added. "These both offset consumers' outlook about the economy, which remained pessimistic, though slightly less so."
The increase by the index reflected positive contributions from seven of the ten indicators that make up the index, including the interest rate spread, average weekly manufacturing hours, and stock prices.
Negative contributions from average consumer expectations for business conditions, average weekly jobless claims, and manufacturers' new orders for non-defense capital goods excluding aircraft helped to limit the upside for the index.
The report also showed that the coincident economic index edged up by 0.2 percent in January following a 0.3 percent increase in December.
Positive contributions from manufacturing and trade sales, employees on non-farm payrolls, and personal income less transfer payments contributed to the increase by the coincident index.
Additionally, the Conference Board said the lagging economic index rose by 0.4 percent in January after climbing 0.3 percent in the previous month.
The increase by the lagging index reflected positive contributions by five of the seven components, including the ratio of consumer installment credit to personal income, the average duration of unemployment, and change in unit labor costs.
Ken Goldstein, an economist at the Conference Board, said, "Recent data reflect an economy that started the year on a positive note."
"The CEI shows some small signs of economic strengthening in the fourth quarter and continued to point in this direction in January," he added. "The LEI suggests these conditions will continue and could possibly even pick up this spring and summer."
by RTT Staff Writer
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