Leading Indicators Signal Strong U.S. Growth Into 2004

By John S. McClenahen "The continued strong growth in the leading index . . . is signaling that strong [U.S.] economic growth should persist in the near term," states the Conference Board, a New York-based business research group. Its leading index of economic indicators for November advanced 0.3% in November to 114.2 (1996=100), according to data released Dec. 18. The leading index, which foreshadows the economy's probable path for three to six months ahead, has increased at nearly a 6% annual rate since its most recent low in April. There's also an indication that U.S. labor market conditions are improving. U.S. Labor Department data released Dec. 18 show that initial claims for unemployment insurance declined more last week than economists generally expected. The seasonally adjusted advance figure for the week ending Dec. 13 was 353,000, down 22,000 from the previous week's revised figure of 375,000 and 7,000 below the generally expected figure of 360,000. "Claims continue to signal an improving labor market," says UBS Investment Research, New York. The Labor Department's four-week moving average of initial claims, which smoothes out week-to-week variations, also fell last week, declining to 361,750, some 2,250 below the previous week's revised average of 364,000.

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