Key U.S. Economic Index Rises for First Time in 7 Months

A key U.S. economic index rose in April for the first time in seven months, suggesting the world's biggest economy is poised for modest growth later this year, the Conference Board said Thursday. The index of leading economic indicators -- which is said to forecast economic conditions in the next three to six months -- increased 1% in April, following a 0.2% decline in March and a 0.5% decline in February. Most analysts had expected a 0.8% increase. "The leading indicators suggest that while the recession will continue in the near term, the declines will be less intense," said Ken Goldstein, an economist at The Conference Board, an independent membership organization. "The question is how long before declines in activity give way to small increases. If the indicators continue on the current track, that point might be reached in the second half of the year." The positive contributors to the index -- beginning with the largest -- were stock prices, interest rate spreads, consumer expectations, initial claims for unemployment insurance, manufacturing hours, supplier deliveries and manufacturers' new orders. The Conference Board's perception of the U.S. economy appears to be around the same as the authorities, which also expect the economy to bottom out and grow later this year. Federal Reserve policymakers are banking on a modest growth in the second half of 2009. The central bank revised its economic outlook Wednesday to show a drop in U.S. output to a range of between 1.3% and 2% over 2009, but said some of the worst declines may be over. U.S. economic output contracted a 6.1% in the first quarter of 2009 after a 6.3% slide in the previous quarter. Copyright Agence France-Presse, 2009