New York, NY, June 19--A key measure of future economic activity rose in May, bolstering hopes that the economy may be headed for a rebound.
The Conference Board reported Thursday that its Composite Index of Leading Economic Indicators increased 1.0 percent in May, after a 0.1 percent rise in April, and a 0.2 percent decline in March. The index serves as an indicator of where the economy is headed in the next three to six months.
Analysts had expected the May index to rise 0.6 percent.
"The Leading Economic Index finally points to a recovery, almost a year and a half after the end of the recession," Conference Board economist Ken Goldstein said. "But the dangers present in the first five months of the year have not disappeared completely."
Goldstein said the main danger still facing the economy was a lack of business confidence, which limits profit recovery. "This is one reason why it has taken so long to build any momentum in business investment in equipment and inventory," Goldstein said.
Eight of the ten components of the leading index rose in May, including real money supply, the index of consumer expectations, stock prices and average weekly manufacturing hours.
The Coincident Index rose 0.1 percent in May, after declining four times in the eight months through April, the group reported. The Lagging Index is still declining, down 0.1 percent in May, after an upwardly revised decline of 0.4 percent in April.
