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U.S. Leading Economic Index Rises Less Than Expected In March

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With rebounding stock prices partly offset by a decline in housing permits, the Conference Board released a report on Thursday showing a smaller than expected increase by its index of leading U.S. economic indicators in March.

The Conference Board said its leading economic index rose by 0.2 percent in March after edging down by a revised 0.1 percent in February.

Economists had expected the index to climb by 0.5 percent compared to the 0.1 percent uptick originally reported for the previous month.

The modest increase by the index reflected positive contributions from six of the ten indicators that make up the index, including stock prices, the interest rate spread, and the Leading Credit Index.

However, the upside for the index was limited by negative contributions from building permits and average weekly initial jobless claims.

"With the March gain, the U.S. LEI's six-month growth rate improved slightly but still points to slow, although not slowing, growth in the coming quarters," said Ataman Ozyildirim, Director of Business Cycles and Growth Research at the Conference Board.

He added, "Financial conditions, as well as expected improvements in manufacturing, should support a modest growth environment in 2016."

The report also said the coincident economic index was unchanged in March after inching up by 0.1 percent in February.

Positive contributions from employees on non-farm payrolls, personal income less transfer payments, and manufacturing and trade sales were offset by a negative contribution from industrial production.

Meanwhile, the Conference Board said the lagging economic index climbed by 0.4 percent in March following a 0.5 percent increase in February.

The continued increase by the index was partly due to positive contributions from commercial and industrial loans outstanding and the average duration of unemployment.

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