The index of U.S. leading indicators rose in December for a third month, indicating the world’s largest economy will keep growing in early 2012.
The Conference Board’s gauge of the outlook for the next three to six months increased 0.4 percent after climbing 0.2 percent in November, the New York-based group said today. The median forecast of 44 economists surveyed by Bloomberg News called for a gain of 0.7 percent. Today’s report marked the first time since 1996 that the components of the index changed.
Gains in manufacturing and consumer spending, the biggest part of the economy, are sustaining the expansion. At the same time, the European debt crisis threatens to limit growth, helping explain why the Federal Reserve yesterday said it’ll keep the benchmark interest rate low until at least late 2014.
“Economic activity picked up toward the end of 2011,” Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh, said before the report. “This provides support for our forecast for continued but moderate economic expansion in 2012.”
Changes in the components of the leading index were announced earlier this month. Instead of the inflation-adjusted money supply, the Conference Board used its own Leading Credit Index, which aggregates measures of the yield curve, interest- rate swaps and the Fed’s senior loan officer survey. The Institute for Supply Management’s supplier deliveries gauge was replaced by the group’s index of new orders.
