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.
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