Index of leading economic indicators rises in December; a key gauge of the economy

Thursday, January 22nd 2004, 12:00 am
By: News On 6

NEW YORK (AP) _ A key measure of future economic activity rose 0.2 percent in December, helped by relatively strong consumer spending and growing indications the job market is improving.

The report released Thursday coincided with government data suggesting that the employment picture may be improving.

The increase in the Conference Board's Composite Index of Leading Economic Indicators matched analysts' forecasts, and brought the gauge to 114.3.

``All indicators point to continued economic growth,'' said Ken Goldstein, economist for the private industry group. ``More job gains than in November and December are in store for the early months of 2004. Consumer spending growth is relatively strong and the strong recovery in business investment in equipment and software remains on track.''

The index of leading indicators is closely watched because it forecasts trends in the economy in the next three to six months. The December figure followed a revised drop of 0.2 percent in November and a 0.5 percent rise in October.

In December, seven of the 10 factors that make up the index increased, including stock prices, building permits and average weekly initial claims for unemployment insurance.

Also Thursday, the Labor Department reported that for the second week in a row, fewer people filed new claims to collect unemployment benefits _ a possible indication that American businesses are growing more confident about the sustainability of an economic recovery.

The Labor Department data showed that for the work week ending Jan. 17, new applications filed for unemployment insurance dipped by a seasonally adjusted 1,000 to 341,000, the lowest level since the end of December. The week before claims fell by 14,000, a sharper decline than the government first estimated a week ago.

The jobless claims report beat the expectations of analysts, who had forecast a rise of about 2,000 for last week.