Key U.S. Economic Index Surges for Second Month

The Conference Board says that its index has become positive for the first time in two years.

The Conference Board said on June 18 that its index of leading economic indicators, a measure of economic conditions in the coming months, increased 1.2% in May from the prior month.

The Conference Board noted that its index had increased in April for the first time in seven months, by a revised 1.1%.

The index, which had been on a downward trend since hitting a peak in July 2007, "has risen sharply in the past two months amid widespread strengths among its components," the Conference Board said. "With these large and extensive increases, the six-month change in the index has become positive for the first time in two years," since April 2007.

The positive leading indicators -- beginning with the largest contributors -- were vendor performance, the interest rate spread, real money supply, stock prices, consumer expectations, building permits and manufacturers' new orders for nondefense capital goods.

They outweighed the negative contributors: average weekly manufacturing hours, average weekly initial claims for unemployment insurance, and manufacturers' new orders for consumer goods and materials.

The Federal Reserve forecasts the economy will contract between 1.3% to 2% in 2009 and post modest 2% to 3% growth in 2010.

Copyright Agence France-Presse, 2009

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