An index of U.S. economic data showed improvement
last month despite recent disappointments in the labor market and
the spiraling financial crisis in Europe.
The index of leading economic indicators, issued monthly by the
New York-based Conference Board, showed that its composite average of
10 leading indicators rose 0.3 percent in May, rebounding from a
0.1 percent drop in April.
The index suggests a "relatively low risk of a downturn in the
second half of 2012," Conference Board economist Ataman Ozyildirim
said.
On Wednesday, the rate-setting US Federal Reserve lowered its
expectations for U.S. growth, due in part to the European financial
crisis. The central bank projected growth in 2012 of 1.9-2.4 percent, down from rosier forecasts of 2.4-2.9 percent as of April. In
2013, the projection dropped, from a range of 2.7-3.1 percent to
2.2-2.8 percent.
Fed chief Ben Bernanke said he expected the jobless rate,
currently at 8.2 percent, to remain at least 8 percent through the
end of 2012.
The May increase brought the index of leading indicators to 95.8,
still below the 2004 basis of 100. Weakness in share prices and
consumer confidence prevented an even large increase.
Seven of the index's 10 indicators showed improvement. Key to the
May improvement was an increase in home-building permits, suggesting
progress in reviving the long-shattered US housing market.
"Economic data in general reflect a US economy that is growing
modestly, neither losing nor gaining momentum," said Ken Goldstein,
another Conference Board economist. "The result is more of a muddle
through. Continued headwinds, both domestic and foreign, make further
strengthening of the economy difficult."
The Conference Board's sister indices - which compile current and
lagging economic indicators - showed improvements similar to the
leading indicators.
The Commerce Department this week said that May building permits,
which point to future construction activity, reached the highest
level since September 2008.
