Leading indicators edge up
Research group's basket of economic measures posts small gain in December.
January 23, 2003: 10:21 AM EST
NEW YORK (CNN/Money) - A basket of leading U.S. economic indicators increased slightly in December, a research group said Friday, hinting at a slow recovery for the economy from its soft patch in late 2002.
The Conference Board, a private research group, said its index of leading economic indicators edged up 0.1 percent to 111.3 after rising a revised 0.5 percent in November. Economists, on average, expected the index to be unchanged, according to Briefing.com.
"After declining from May through September 2002, the leading index has now improved for three straight months, suggesting a stronger economic recovery in the first half of 2003," the Conference Board said in a release.
The report had little impact on U.S. stock prices, which were mixed in early trading. Treasury bond prices fell.
Eight of the ten indicators that make up the leading index rose in December, including permits for new construction, average weekly labor hours in the manufacturing industry and the index of consumer expectations derived from the firm's monthly consumer confidence survey.
The two indicators showing weakness were rising weekly jobless claims and falling stock prices.
Following a recession that began in March 2001, the U.S. economy seemed to find its footing in early 2002 before stumbling again late in the year. Many economists believe economic growth, as measured by gross domestic product (GDP) was nearly non-existent in the fourth quarter.
Most economists are expecting some improvement in 2003, though President Bush and Congress are working on a package of tax cuts and spending programs they hope will give the economy a shot in the arm.
The Federal Reserve is also keeping a watchful eye on developments; the central bank's policy makers are scheduled to convene a two-day meeting next week. They are expected to leave their target for a key short-term interest rate alone -- it's already at its lowest level since 1961 -- but could step in if signs of weakness continue.
Many economists believe tensions in Iraq will need to be resolved before the economy can really start to grow with any gusto. Many businesses are delaying spending and hiring plans until they see how the United States handles the situation. |
