Leading Indicators Rise Two Months In A Row

As you might expect, it was quite an under-reported event last Thursday when the Conference Board released its report of economic indicators.

Why was it under-reported? Because the data actually surprised analysts when it came in with a key positive number for the month of January. The Index Of Leading Economic Indicators for the second month in a row showed an increase in economic activity.

The Conference Board on Thursday said that its January index of leading economic indicators rose 0.4 percent. The majority of economists surveyed had expected no change in the index.

The index forecasts economic activity for the next three to six months based on 10 economic components. This is also the first time since the big chill in October that 5 of 10 economic components have turned positive.

What was no surprise was that the single biggest boost to the index was the real money supply as the Fed continues to pump more money in circulation. Other factors that increased in January included: the interest rate spread, an index of consumer expectations, and manufacturing orders for non-defense and consumer goods.

In December the index had increased 0.2 percent following a drop of 0.7 percent in November.

More current data is out this week and it will likely show -- much like the Conference board -- that the intensity of this recession is indeed easing.

Conference Board economists (like many others) see a return to growth in the second half of 2009 and solid growth in 2010.