Leading Indicators Suggest Economic Surge
The Conference Board's report of leading economic indicators, which forecasts where the nation's economy is headed, increased 0.6 percent in April following a decline of 0.2 percent in March, exceeding analysts' expectations and suggesting an economic expansion.
Experts polled by Yahoo Finance had expected a rise of just 0.3 percent. In a separate report, the widely watched monthly consumer sentiment report by the University of Michigan and Thomson Reuters also exceeded expectations, registering an 83.7 reading, above Yahoo experts' predictions of a 79.
The reports helped lift stocks this morning in early trading. As of 10:30 a.m., the Dow Jones Industrial Average, the Nasdaq and the S&P 500 were all up about 0.5 percent.
Ataman Ozyildirim, an economist at The Conference Board, said a rise in housing permits helped lead to the rebound in the leading economic indicators (LEI). He added that labor market improvement also helped. But he said consumers' outlook remains weak.
"In general, the LEI points to a continuing economic expansion with some upside potential," he said.
Ken Goldstein, another economist at The Conference Board, said the 3.5-percent jump in the LEI over the last six months suggests expansion, but he cautioned about the impact of cuts in federal government spending.
"The biggest positive factor is the potential for improvement in the recovering housing and labor markets," he said. "The biggest unknown is the resiliency in confidence, both consumer and business."
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