Survey Forecasts Business Growth

If you are looking for good economic news (and I am!) there are lots of indicators pointing up. Here's another...

The index of leading indicators posted a gain of 1.4% in March, the largest increase in 10 months and another sign of a recovering economy. The figures, released this week by the Conference Board, indicate expected growth in the economy over the next three to six months. "The indicators point to a slow recovery that should continue over the next few months," said Ken Goldstein, an economist with the Conference board. "Strength of demand remains the big question going forward. Improvement in employment and income will be the key factors in whether consumers push the recovery on a stronger path."

The 1.4% increase is greater than initial estimates, which had pinned growth closer to 1%. The board also revised its February total to .4%, after it initially reported a .1% increase. In total, seven of the 10 leading indicators grew last month, including the spread between short-term and long-term interest rates (a sign of belief in future economic growth).

Economists believe the data indicates a perking up of the housing market and manufacturing after a tough winter in the Northeast, as well as broader trends of improved consumer spending and corporate investment in technology.

However, forecasts for next month are not as optimistic. "We look for a much smaller increase in the index in April," wrote Ian Shepherdson, chief U.S. economist with High Frequency Economics. "The index, in our view, is very likely overstating growth substantially.”