Coincident indicators show slow expansion, Conference Board says
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) - Leading U.S. economic indicators increased 1.1% in December and have risen for nine straight months, suggesting "that the pace of improvement could pick up this spring," according to a report released by the Conference Board on Thursday.
"Economic conditions should continue to improve in the near term," the Conference Board said.
The rise in the index was stronger than the 0.7% increase expected by economists surveyed by MarketWatch. That survey of economists was done before a large gain in building permits was reported by the government.
Eight of the 10 leading indicators improved in December, a broad-based gain that points to "an economy in early recovery," said Ken Goldstein, an economist for the Conference Board, a private research organization that analyzes economic data provided by other organizations.
The coincident index increased 0.1% in December, the fifth increase in the past six months. Three of the four coincident indicators improved in December, with only payrolls declining.
Those four coincident indicators - industrial production, payrolls, business sales, and income - are the same ones used by an academic committee of historians who rule on when recessions end and expansions begin. The committee has not made a judgment yet, but most economists believe that ultimately it will say the recession ended sometime last summer.
In the past six months, the leading indicators have risen 5.2%, with eight of 10 indicators rising over that period. The coincident index is up 0.6% in the past six months, with three of four indicators rising.
In December, gains in the leading index were propelled by the interest-rate spread, building permits, jobless claims and stock prices. Consumer expectations, vendor performance, the real money supply and capital goods orders also improved. The other two leading indicators - factory workweek and consumer goods orders - were steady in December.
