By Bob Willis April 19 (Bloomberg) -- The index of U.S. leading indicators probably rose in March by the most in three months, a sign the economy will keep growing into the second half of the year, economists said before a report today. The Conference Board’s measure of the outlook for three to six months increased 1 percent, according to the median estimate of 41 economists surveyed by Bloomberg. That would follow a 0.1 percent rise and mark the 12th straight gain, the longest such stretch since 2004. Manufacturers are ratcheting up production and factory workers are putting in longer hours as companies rebuild inventories and ship more goods overseas. Further improvement in the job market will help sustain the economy’s recovery from the worst recession since the 1930s. “The economy is recovering and leading indicators are likely to reflect further future improving economic conditions,” said Jason Schenker, chief economist at Prestige Economics LLC in Austin, Texas. Economists’ estimates ranged from gains of 0.4 percent to 1.5 percent. The New York-based Conference Board will release the report at 10 a.m. Six of the 10 indicators in the leading index probably contributed to the March gain, led by the interest-rate spread, slower supplier deliveries, gains in stock prices and more building permits, according to Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado. The positive spread between the yield on the 10-year Treasury note and the overnight fed funds rate reflects investor expectations the economy will keep improving. Supplier Deliveries The supplier delivery index, a component of the Institute for Supply Management’s factory survey, rose in March to the highest level since June 2004, indicating slower delivery times as demand mounts. This year’s rise in stocks continued through March. The Standard & Poor’s 500 Index averaged 1,152.05 last month, up from 1,089.16 in February. The S&P 500 Index has gained 6.9 percent this year through April 16. Building permits in March rose 7.5 percent from the prior month to a 685,000 annual pace, the biggest gain since December, the Commerce Department reported last week. Average weekly initial jobless claims fell to 448,000 in March from 467,500 in February, indicating firings were easing. Payrolls rose 162,000 in March, the biggest monthly gain in three years, Labor Department figures showed April 2. JPMorgan Hiring JPMorgan Chase & Co. is among companies hiring. Chief Executive Officer Jamie Dimon last week announced plans to hire nearly 9,000 employees in the U.S. as first-quarter earnings rose 55 percent from a year earlier. “While the economy still faces challenges, there have been clear and broad-based improvements in underlying trends,” Dimon said in a statement. Dean Maki, chief U.S. economist at Barclays Capital Inc. last week raised his forecast for U.S. growth this year to 3.8 percent from a prior estimate of 3.5 percent. Economists surveyed by Bloomberg in the first week of April forecast the economy would expand 3 percent this year, compared with last year’s 2.4 percent contraction. 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 Federal Reserve last week said the economy expanded “somewhat” across most of the U.S. in March as consumer spending and manufacturing improved, signaling the recovery is broadening without gaining much speed. Fed Chairman Ben S. Bernanke told lawmakers there were “significant restraints” on a recovery he said would be “moderate” in the coming quarters. Bloomberg Survey ==================================== LEI MOM% ==================================== Date of Release 04/19 Observation Period March ------------------------------------ Median 1.0% Average 1.0% High Forecast 1.5% Low Forecast 0.4% Number of Participants 41 Previous 0.1% ------------------------------------ 4CAST Ltd. 1.3% Action Economics 1.1% Bank of Tokyo- Mitsubishi 1.5% Barclays Capital 1.1% Bayerische Landesbank 1.2% BMO Capital Markets 1.0% BNP Paribas 0.7% BofA Merrill Lynch Research 1.1% Briefing.com 1.0% Brusuelas Analytics 1.0% Citi 1.3% Commerzbank AG 1.0% Credit Suisse 1.2% DekaBank 1.1% Desjardins Group 1.1% Deutsche Bank Securities 1.3% Deutsche Postbank AG 1.0% DZ Bank 0.6% First Trust Advisors 1.3% FTN Financial 0.8% Helaba 1.0% IDEAglobal 0.5% Informa Global Markets 0.7% Janney Montgomery Scott 0.9% Jefferies & Co. 0.9% Johnson Illington Advisors 1.0% Landesbank Berlin 0.9% Landesbank BW 1.0% Maria Fiorini Ramirez Inc 1.0% Moody’s Economy.com 1.3% Morgan Keegan & Co. 0.7% Nomura Securities Intl. 1.4% PNC Bank 0.6% Raymond James 1.4% Standard Chartered 1.0% Stone & McCarthy Research 1.3% University of Maryland 0.4% Wells Fargo & Co. 1.3% WestLB AG 1.2% Westpac Banking Co. 1.0% Woodley Park Research 1.5% ==================================== To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net.

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