Conference Board: Economic Indicators Looking Up

Both leading economic indicators and lagging economic indicators for the U.S. economy rose in January, according to ""The Conference Board"":http://www.conference-board.org/, a global, independent research organization based in New York.

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Leading economic indicators are generally those indicators that change first before the rest of the economy follows. These include items such as average weekly hours of manufacturing, average initial unemployment claims, building permits, stock prices, and interest rate spreads on Treasury bonds.

The Conference Board's Leading Economic Index increased 0.2 percent in January to 94.1 after posting a slightly higher 0.5 percent increase in December.

""The U.S. LEI rose again in January, pointing to a slow but continued expansion in economic activity in the near term,"" said Ataman Ozyildirim, an economist at The Conference Board.

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While the Board found ""weakness in manufacturers' new orders and consumer expectations,"" housing was a bright spot in the index. ""[I]mprovements in housing permits and financial components helped boost the LEI in January,"" Ozyildirim said.

A second Conference Board economist echoed Ozyildirim's observation, saying ""The biggest positive factor is housing.""

""The housing market is now at twice the level reached during its recessionary lows, and will likely continue to improve through the spring, delivering some growth momentum to the labor market and the overall economy,"" Ken Goldstein said.

He pointed to federal spending cuts as ""the biggest risk"" to the economy.

The Conference Board Lagging Economic Index increased at a higher rate than the Leading Economic Index in January. The Lagging Economic Index rose 0.4 percent over the month to 116.7, up from a 0.1 percent increase in December.

Lagging indicators are the opposite of leading indicators: They include economic factors that generally change a few quarters behind the rest of the economy, such as the average length of unemployment, changes in the consumer price index for services, changes in labor costs, the ratio of manufacturing inventories to sales, and the values of commercial industrial loans.

""The indicators point to an underlying economy that remains relatively sound but sluggish,"" Goldstein said.