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Title: Leading Economic Indicators in U.S. Climb for the Seventh Straight Month
Source:
Bloomberg
URL Source: http://noir.bloomberg.com/apps/news ... 0601087&sid=aIhSzeF8tiz4&pos=1
Published: Feb 17, 2011
Author: By Shobhana Chandra
Post Date: 2011-02-17 11:37:45 by Brian S
Keywords: None
Views: 890
Comments: 1
Feb. 17 (Bloomberg) -- The index of U.S. leading indicators rose in January for the seventh straight month, signaling the expansion will extend into this year. The Conference Board’s gauge of the outlook for the next three to six months increased 0.1 percent after rising 0.8 percent in December, the New York-based group said today. The median forecast of economists surveyed by Bloomberg News was a 0.2 percent gain. Rising consumer spending, business investment and exports are ensuring the economy continues to grow even as housing remains depressed. Today’s report is in line with the view of Federal Reserve policy makers, according to minutes of their meeting released yesterday, that the recovery is on a “firmer footing” while the labor market was improving ‘gradually.” “The economy will continue to grow solidly over the next couple of quarters,” said Harm Bandholz, chief U.S. economist at UniCredit Group in New York, who accurately forecast the gain in the index. “Consumer spending will be the engine of growth. The labor market continues to improve.” Estimates of 56 economists in the Bloomberg survey ranged from a drop of 0.7 percent to a gain of 0.7 percent. The Standard & Poor’s 500 Index decreased 0.1 percent to 1,334.84 at 10:34 a.m. in New York. Treasury securities rose, pushing the yield on the benchmark 10-year note down to 3.56 percent from 3.62 percent late yesterday. Six of the 10 indicators in the leading index contributed to the increase, led by the interest-rate spread and the stock market. Interest-Rate Spread The interest-rate spread between the overnight federal funds rate and the yield on the 10-year Treasury note widened, boosting the index by 0.34 point. The stock market rally added 0.12 point. The Standard & Poor’s 500 index, which reached a 32-month high yesterday, is up 6.3 percent since the beginning of the year. The Thomson Reuters/University of Michigan index of consumer expectations, which rose to 69.3 in January from 67.5 in December, added 0.05 point to the leading gauge. Supplier delivery times and new orders for consumer and capital goods also contributed to the index. Slower deliveries signal factories are having trouble keeping up with demand. Four of the index components retreated. Building Permits Building permits subtracted 0.29 point from the measure. Permits, an indicator for future construction, fell 10 percent to a 562,000 annual pace in January, Commerce Department figures showed yesterday. Money supply, weekly jobless claims and the factory workweek also took away from the index. The Conference Board’s index of coincident indicators, a gauge of current economic activity, rose 0.1 percent after a 0.3 percent gain in the prior month. The coincident index tracks payrolls, incomes, sales and production -- the measures used by the National Bureau of Economic Research to determine the beginning and end of U.S. recessions. The gauge of lagging indicators decreased 0.1 percent last month. The index measures business lending, length of unemployment, service prices and ratios of labor costs, inventories and consumer credit. CSX Corp., the second-largest publicly traded U.S. railroad, is among companies benefiting as the recovery generates demand. ‘Gradual Pace’ “The economy is growing, it’s growing at a nice, gradual pace, nothing too fast, nothing too quick,” Oscar Munoz, chief financial officer of Jacksonville, Florida-based CSX, said on a conference call on Feb. 15. “It’s perfect for the kind of business we run.” Seven of the 10 indicators that make up the leading index are known ahead of time: stock prices, jobless claims, building permits, consumer expectations, the yield curve, factory hours and supplier delivery times. The Conference Board estimates new orders for consumer goods, bookings for capital goods and the money supply adjusted for inflation. Central bank officials “continued to express disappointment in both the pace and the unevenness of the improvements in labor markets,” while also judging the recovery to be on a “firmer footing,” the Fed said in minutes of its Jan. 25-26 meeting, released yesterday in Washington.
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#1. To: Brian S (#0)
All is PERFECT in the Economy!
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Top • Page Up • Full Thread • Page Down • Bottom/LatestThe index of U.S. leading indicators rose in January for the seventh straight month, signaling the expansion will extend into this year.
We are in COMPLETE control!
Buy T-bills, not gold or silver!
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