US economic growth should continue, leading indicators say

17 May 2013 16:03  [Source: ICIS news]

WASHINGTON (ICIS)--US economic growth will continue at a modest pace over the next several months and could pick up some speed toward the end of the year, a key business survey indicated on Friday.

The Conference Board, a 96-year-old business analysis group in New York City, said that its leading economic index (LEI) rose by 0.6% in April to a reading of 95.

The April gain more than offset the slight 0.2% decline registered in March. The index had a 0.4% improvement in February.

The current index is measured against the baseline level of 100 set in 2004, before the 2008-2009 US recession.

The LEI represents a cumulative measure of 10 different business and economic gauges such as manufacturers’ new orders, residential building permits, interest rates and consumer sentiment, among others.

Conference Board economist Ataman Ozyildirim said that the LEI’s April rebound was led by improvements in the US home-building sector and continuing low interest rates.

“Labour conditions also contributed” to the April LEI improvement, he said, “although consumers’ outlook on the economy remains weak.”

“In general, the LEI points to a continuing economic expansion with some upside potential,” he added.

Board economist Ken Goldstein noted that the LEI “is 3.5% higher on an annualised basis than six months ago, suggesting expansion”.

But Goldstein said that the modest recovery faces some risks, particularly in federal spending cuts mandated by Congress and uncertainty about the level of confidence among both consumers and business.

Taken together, said the board, the index and its component measures “suggest that the pace of economic growth will remain positive in the upcoming months and may even pick up slightly toward the end of the year”.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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