By John S. McClenahen The signs of a U.S. economic recovery are starting to outnumber signals to the contrary. Among the latest: The Conference Board's closely watched Index of Leading Indicators advanced 0.3% in July, its third consecutive increase. Five of the 10 indicators in the index, including average weekly manufacturing hours, rose during July, while three indicators, led by stock prices, declined. The two remaining index components -- manufacturers' new orders for nondefense capital goods and manufacturers' new orders for consumer goods and materials -- held steady for the month. Together they are a "welcome sign that the second half of 2001 will be better than the first," says David Huether, an economist at the National Assn. of Manufacturers, Washington. "The expansionary monetary policy adopted by the Federal Reserve since the first half of this year continues to be the primary factor pushing the leading index up," said the Conference Board in advance of today's meeting of the interest-rate setting Federal Open Market Committee.