NEW YORK – The index of U.S. Leading Economic Indicators rose 0.3 percent in May to 138 points (1996 = 100) after falling a revised 0.3 percent in April, according to a report released today by The Conference Board.
The increase exceeded analysts’ expectations. The index was expected to rise 0.2 percent in May after falling the originally reported 0.5 percent in April, according to a survey of 58 economists by Bloomberg News. Their forecasts ranged from a decline of 0.1 percent to an increase of 0.5 percent.
The Conference Board’s leading indicators point to the nation’s economic outlook over the next three to six months.
Improvements were seen in five of the index’s 10 indicators, led by declines in initial claims for unemployment insurance, followed by rising stock prices, increases in building permits issued, and higher consumer expectations and vendor performance.
Holding steady were manufacturers’ new orders for both consumer goods and materials and non-defense capital goods. Losing ground in May were the nation’s real money supply, average weekly manufacturing hours and the interest-rate spread.
Over the six months ended in May, the index grew by 0.3 percent, with advances seen in four of 10 components.
“The winter blahs for the economy seem to have receded,” Neal Soss, chief economist at Credit Suisse Group in New York, told Bloomberg News. “One of the most reassuring features of the economy has been job growth, and we expect that to persist.”
Analysts surveyed by Bloomberg said that increases in business investment and a jobless rate that continues to hover near its six-year low (despite a separate report today by the U.S. Department of Labor showing that new unemployment claims rose last week for the third week in a row) are helping compensate for higher fuel costs, spurring them to raise their forecasts.
The Conference Board produces reports including the U.S. and other Consumer Confidence Index and Leading Economic Indicators. Additional information is available at www.conference-board.org.
