By Ruth Mantell, MarketWatch
WASHINGTON (MarketWatch) — Data suggest that the economy will continue to grow this winter, and possibly pick up momentum by spring, the Conference Board said Thursday.
The private research group’s index of leading economic indicators grew 0.5% in November, led by the interest-rate spread and building permits. However, problems in Europe could derail a positive economic outlook, noted Ken Goldstein, a Conference Board economist, in a statement.
“This somewhat positive outlook for the domestic economy is at odds with a global economy that appears to be losing steam,” Goldstein said.
Economists polled by MarketWatch had expected growth of 0.3% in November, compared with a 0.9% gain in October. See economic calendar.
The LEI is a weighted gauge of 10 indicators designed to signal business cycle peaks and troughs. Among the 10 indicators that make up the LEI, seven made positive contributions in November: the interest-rate spread, building permits, the real-money supply, the consumer-expectations index, average weekly claims for unemployment-insurance benefits, stock prices, and manufacturers’ new orders for nondefense capital goods.
Three turned in negative readings on the month: average weekly manufacturing hours, the supplier-delivery index, and manufacturers’ new orders for consumer goods and materials.
Improving data
Analysts have been cheered by recent improvements in housing, employment and consumer-sentiment data.
On Thursday, the Labor Department reported that initial claims for regular state unemployment-insurance benefits filed last week stood at the lowest level since April 2008. Read more about jobless claims.
Also Thursday, data indicated a growth in consumer sentiment in December. Read more on the latest survey results compiled by the University of Michigan and Thomson Reuters.
Earlier this week, data indicated that there have been gains in sales of existing homes as well as in the pace of construction of new homes. Read more about home sales.
“For the second month in a row, building permits made a relatively strong contribution, and there is a chance that the long decline in housing is finally slowing,” Goldstein said.
However, there has been a slowdown in longer-term growth of the LEI. For the six months through November, the index gained 2.8%, compared with growth of 3.1% in the prior six months.
In a similar vein Thursday, the government reported a downward revision in its estimatre of economic growth for the third quarter, to a 1.8% annualized rate. Read more about GDP.
Investors contained their enthusiasm on Wall Street, with the Dow Jones Industrial Average DJIA +0.18% and other stock-market benchmarks managing modest gains in morning trading. Read more on U.S. stocks and Thursday’s raft of data.
