A key barometer of future economic activity in the United States has registered its third consecutive monthly increase, a sign that the sluggish U.S. economy may be gaining strength. The Conference Board's Index of Leading Economic Indicators rose a modest 0.1 percent in June, propelled by growth in the U.S. money supply, boosts in stock prices, reduced initial claims for unemployment benefits and an increase in building permits. Conference Board economist Ken Goldstein says what is noteworthy is that the index's rise in June followed a sharp 1.1 percent increase in May and a 0.1 percent gain in April.
"We have been waiting for a year and a half for the economy to finally get into a recovery that begins to feel like a recovery," he said. "And these [index numbers] are, if you will, blood pressure readings to suggest that the economic body is, indeed, starting to show signs of life. If, indeed, the economy is starting to make a move now, then perhaps late in the year or early in 2004 we can finally see an economy growing fast enough to allow growth in new jobs."
The Index of Leading Economic Indicators serves as a barometer of future economic activity in the United States. An index of current economic activity, the so-called "coincident indicators," also registered a modest gain in June for the second consecutive month. Economist Ken Goldstein says the two indexes are showing encouraging signs, but he cautions that they do not, by themselves, provide definitive proof that a robust economic recovery is underway.
The New York-based Conference Board is a non-profit organization dedicated to providing information and analysis on the U.S. economy.