WASHINGTON – The index of U.S. leading indicators climbed in January, an indication the economy will bounce back after winter storms damped economic growth at the beginning of 2014.
The Conference Board’s gauge of the outlook for the next three to six months rose 0.3 percent after no change in the prior month, the New York-based group said today. The advance matched the median forecast of 50 economists surveyed by Bloomberg.
Higher equity prices and home values last year have helped bolster household wealth, giving Americans the means to sustain spending after a winter-related slowdown. A pickup in job and wage growth following a decline in dismissals would provide an added spark for consumers whose purchases account for almost 70 percent of the economy.
“Interest rates are still extremely low and housing and equity wealth have generally been rising,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, N.Y., said before the report. “The backdrop in terms of financial conditions is quite favorable. I think we’ll continue to see solid growth once we get through the weather effects.”
Estimates in the Bloomberg survey ranged from a decrease of 0.2 percent to an increase of 0.6 percent, after a previously reported 0.1 percent December gain.
Five of the 10 indicators in the leading index contributed to the increase, today’s report showed. They included a drop in jobless claims and a pickup in factory orders. Declines in building permits and hours worked weighed on the measure.
Another report today showed fewer Americans filed applications for unemployment benefits last week, a sign employers are holding the line on firings even as cold weather slowed industries from manufacturing to housing. Jobless claims declined by 3,000 to 336,000 in the week ended Feb. 15, the Labor Department said.
The Conference Board’s index of coincident indicators, a gauge of current economic activity, rose 0.1 percent for a second month. That index covers payrolls, incomes, sales and production, measures used by the National Bureau of Economic Research to determine when U.S. recessions start and end.