Bullish Data Fuel Hope U.S. Economy Has Turned

By Agence France-Presse The long-elusive U.S. economic turnaround may already be here, analysts said Aug. 21 as the mercury in a key barometer rose and new jobless numbers shrank to a six-month low. The Conference Board's index of leading economic indicators, a closely watched sign of activity expected in the coming months, rose 0.4% in July, the fourth monthly improvement in a row. "The bottom line is that the leading economic indicators are now more favorable than at any time since the recession started more than two years ago," Conference Board economist Ken Goldstein said. "With export growth still months away, the burden now falls on consumer spending and business investment," he said, predicting a better economy this fall. The Conference Board is a New York-based business research organization. After 2% growth in U.S. economic output -- gross domestic product (GDP) -- in the first half of this year, the pace could double before the year is out, he said. Stubborn weakness in the jobs market could last, however, until the fourth quarter of this year, Goldstein warned. "Still, the latest readings are telling us that the economy is now gaining momentum and it is but a matter of time before it turns strong enough to drive a recovery even in the labor market," he said. The number of people lodging new claims for U.S. jobless benefits tumbled 17,000 to a six-month low of 386,000 last week, seasonally adjusted government figures showed. Massive power cuts in the northeastern United States on Aug. 14 had only a "very minimal" impact on the data, cutting about 2,000 to 3,000 claims, a Department of Labor official said. "Jobless claims are very encouraging, suggesting that we may see an upturn in non-farm payroll employment in August for the first time in six months," BMO Financial Group economist Sal Guatieri said. The Conference Board's leading economic indicators, which are based on 10 indicators such as consumer expectations, were now showing a strong upward trend, he said. The data were consistent with a rising pile of bullish July numbers, including a surprise 1.4% gain in retail sales, a 17-year record in groundbreaking on new housing projects and a steeper-than-expected 0.5% increase in industrial production. Copyright Agence France-Presse, 2003