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Business Title: U.S. Leading Indicators Gain a 10th Month in Sign Economy to Keep Growing Feb. 18 (Bloomberg) -- The index of U.S. leading indicators rose in January for a 10th straight month, pointing to an economy that will keep expanding through the first half of this year. The New York-based Conference Board’s measure of the outlook for three to six months increased 0.3 percent, less than anticipated, after a revised 1.2 percent rise in December that was higher than previously estimated. The series of gains in the index is the longest since 2004. Companies are stepping up production and asking employees to work more hours to meet greater demand that may help spur hiring in coming months. Faster economic growth will depend on employment gains that have yet to occur. “You’re getting indications that the recovery is being sustained and a sustained recovery eventually leads to a labor market recovery,” said Jonathan Basile, an economist at Credit Suisse in New York. “The more we get news that these indicators are growing and continue to grow, that’s something that’s going to eventually lead to gains in jobs.” Stocks maintained gains after a separate report showed manufacturing in the Philadelphia area expanded in February for a sixth month. The Federal Reserve Bank of Philadelphia’s general economic index rose to 17.6 from a January reading of 15.2. Readings greater than zero signal growth. Stocks Rise The Standard & Poor’s 500 Index increased 0.3 percent to 1,102.73 at 10:16 a.m. in New York. The 10-year Treasury note fell, pushing up the yield three basis points to 3.76 percent. Economists forecast the leading indicators index would increase 0.5 percent after a previously reported 1.1 percent gain for December, according to the median of 58 projections in a Bloomberg News survey. Estimates ranged from a drop of 0.4 percent to a gain of 1 percent. Separate reports today from the Labor Department showed that more Americans filed first-time claims for unemployment last week and producer prices in January rose more than anticipated. Initial jobless claims increased by 31,000 to 473,000 in the week ended Feb. 13. Economists forecast claims would fall to 438,000, according to the median estimate in a Bloomberg survey. Prices paid to producers jumped 1.4 percent, led by higher costs of energy, light trucks and pharmaceuticals. Excluding energy and food, so-called core producer prices rose 0.3 percent in January. Five Indicators Five of the 10 indicators in the leading index contributed to the gain, led by the yield curve, supplier deliveries and the factory workweek. Four of the components fell. Higher jobless claims, a drop in the money supply and fewer building permits weighed on the index. The Conference Board’s index of coincident indicators, a gauge of current economic activity, rose 0.2 percent in January, following no change a month earlier. The 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. The world’s largest economy will probably expand at a 3 percent annual rate this quarter and 2.8 percent from April through June, according to the median estimate of economists surveyed by Bloomberg earlier this month. Known Ahead 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. The Standard & Poor’s 500 Index averaged 1,123.58 in January, compared with 1,110.38 a month earlier. The Reuters/University of Michigan index of consumer expectations increased in January to 70.1. Also fueling the gain in the leading index last month, U.S. factory workers’ hours rose to 40.8 in January, from 40.6 in December, according to data from the U.S. Labor Department. That was the highest since August 2008. ‘Back in Business’ “Business is back in business,” Caterpillar Inc. Chief Executive Officer James Owens said Feb. 11 at a news conference for the Business Council’s survey on CEO sentiment. “While we may be expecting a bit of a sluggish recovery, at least solid economic growth, stability in compensation and maybe some growth there, and increasing investment,” is occurring. The Business Council’s confidence gauge climbed to 64.7 for February, the highest level in at least four years and up from 63.2 in the October survey. Readings greater than 50 signal economic growth. Eaton Corp. is seeing demand increase in its auto and trucks unit, which Chief Executive Officer Sandy Cutler said is typical early in an economic cycle. The global recovery will be a more muted rebound with higher-than-normal growth from underdeveloped countries, he said. “I think 2010 in many ways is a transitional year,” Cutler said in an interview. In the U.S., “part of what we are seeing now is the early cycle businesses are recovering.”
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#1. To: Brian S (#0)
He'll prove to be wrong by the 2nd quarter of 2011. Watch and see.
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