WASHINGTON (2/21/14)--The economy appears to have weathered unusually harsh winter months, according to data released Thursday by the Conference Board.
The research firm's Leading Economic Index (LEI) increased by 0.3% in January after stagnating in December. Conference Board economists said this indicates that the U.S. economy is "expanding moderately" and that it "will remain resilient in the first half of 2014."
Five of 10 LEI components pushed the measure upward. The interest rate spread made the most positive contribution, with building permits being the largest drag on the gauge (MarketWatch
Feb. 20). MarketWatch
said that winter storms have been especially tough on retail sales and the housing market.
The differing components reflect recent conflicting reports about the state of the economy. The Federal Reserve Bank of Philadelphia said Thursday that regional manufacturing fell significantly in February due to snowstorms. MarketWatch
also reported that a separate indicator of U.S. manufacturing was at its highest level since 2010. The Conference Board's Coincident Economic Index (CEI), a measure of current conditions, also grew by 0.1% in January.
Both the CEI and the LEI have grown over the past few months, with the latter having increased by 3.1% in January and the five months preceding it.
Conference Board economist Ken Golstein warned that consumer demand and investment need to increase to accelerate growth.
The LEI is a composite measurement of:
Average weekly manufacturing hours;
Average weekly initial unemployment insurance claims;
Manufacturers' new orders;
The Institute for Supply Management index of new orders;
Manufacturers' new orders excluding defense capital goods and aircraft orders;
Building permits for private housing units;
The prices of 500 common stocks;
The Leading Credit Index;
The interest rate spread of 10-year Treasury bonds; and
Average consumer expectations for business conditions.