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Leading indicators up a notch
©Associated Press NEW YORK -- A key measure of economic activity rose for the third straight month in December, buoyed by strong contributions from housing permits and new orders for consumer goods, an industry group reported Thursday. The Index of Leading Economic Indicators increased 0.1 percent in December to 111.3, according to the New York-based Conference Board. The index rose 0.5 percent in November and 0.2 percent in October. Analysts were expecting the index to be flat. "Three consecutive increases in the Leading Economic Indicators suggest that the economy might turn in a better performance in the first quarter of 2003 than it did in the second half of last year," said Conference Board economist Ken Goldstein. The index measures where the overall U.S. economy is headed in the next three to six months. It stood at 100 in 1996, its base year. The index has almost regained its May level -- when it started to decline. From May to September, the index fell, but started to recover in October and has posted increases since then. "This is a better-than-expected report, an encouraging report," said Sung Won Sohn, chief economist for Wells Fargo & Co. "We see signs of economic recovery here and there, except that we are still coming out of a soft patch and trying to get on a firmer ground." In December, housing permits, average manufacturing workweek and consumer expectations more than offset the negative unemployment figures, the Conference Board said. Eight of the 10 indicators that make up the leading index were higher in December, including interest rate spread and manufacturers' new orders for nondefense capital goods. Average weekly unemployment claims and stock prices were the only two negative factors that weighed on the leading index. "Many businesses are still shell-shocked and now have to worry about the possibility of war, generating a tremendous amount of concern," Sohn said. "As a result, business people are unwilling to make long-term commitments such as hiring people, and investors are too cautious and not willing to dive into the stock market until geopolitical concerns are settled." In the latest report on the employment front, the government said Thursday that the number of Americans filing new claims for unemployment benefits rose by 18,000 last week, as companies continued to hold down costs by laying off workers. The Labor Department said a total of 381,000 newly laid off workers filed for jobless benefits last week, compared to a revised figure of 363,000 the previous week.
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From the Times Business report
From the AP
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