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To: maceng2 who wrote (152655)	2/21/2002 2:41:07 PM
From: maceng2	Read Replies (2) \| Respond to of 436258

opps what a surprise... siliconinvestor.com Key Economic Gauge Sees Strong Recovery Feb 21 12:25pm ET By Mark Wilkinson WASHINGTON (Reuters) - The U.S. economy might already be out of recession and its recovery could be much stronger than expected, a private research firm said on Thursday, as its economic forecasting gauge rose for the fourth consecutive month in January. The Conference Board reported that the U.S. index of leading economic indicators rose 0.6 percent in January after a much stronger 1.3 percent rise in December, which was the largest in almost six years. The January rise exceeded expectations of Wall Street economists who had forecast the index would grow 0.5 percent. "We might be out of recession already," Ken Goldstein, the board's chief economist, told Reuters. "The recovery could be more vigorous than earlier anticipated." "Given this string of strong increases, the cumulative rise in the Index over the past six months is very positive and suggests gathering economic momentum." He added that the breadth and consistency of increases since October points to a sustainable recovery. Over the past four months, the leading index has risen 2.8 percent, an increase that would have, "those who are skeptical about a strong recovery change their view," Peter d'Antonio, an economist at Salomon Smith Barney, told Reuters. "(This increase) is giving the signal that growth is going to be healthy this year." But the National Association of Manufacturers' chief economist, David Huether, expressed more caution, saying the recovery "will likely be gradual," as trade prospects remain dim because of only "modest improvements in economic growth abroad and an overvalued dollar." STRONG CONFIDENCE Goldstein said one of the main driving forces of the recovery will be consumer spending, which represents two-thirds of economic growth and remained solid in the closing months of last year, despite the economic downturn. While consumers took advantage of zero-financing bargains in December, which many feared would pull spending out of January, spending has continued in the early months, Goldstein said. And as confidence remains strong and the depleted inventories of manufacturers have to be restocked, productivity is poised to pick up and boost profits, d'Antonio said. Profitability may have already bottomed out, as American corporations widened margins by cutting costs and trimming workforces as the economy began to slow. But Goldstein said that, while the outlook is very bright, sluggish profits could still pose a limited threat to the economic recovery. "The stock market is not taking off," he said. "There is still a chance for a double dip due to weak profits, but less now." HEALING MANUFACTURING While manufacturing was one of the American economy's weakest sectors in recent months, and the first to go into recession in 2000, inventory corrections and consumer spending may just pull it out of the red. Another sign manufacturing may be healing came Wednesday, as NAM released a survey showing capital investment would grow about three percent in the first half of the year and seven percent in the closing months of 2002. NAM's president, Jerry Jasinowski, said the economy was pulled out of the 1991 recession by productivity, which was mainly stimulated by high investment in equipment. The lagging index, which measures past trends in the economy, was unchanged last month after a 0.1 percent increase in December. Six of the 10 components that make up the leading indicators index rose in January, led by slower deliveries, consumer expectations and jobless claims. The remaining four components, the average work week, stock prices, capital goods orders and manufacturers' new orders, fell in January.