Key Measure of Economy Rises for 5th Month : Commerce: May’s advance in the leading indicators is modest, however. It fails to ease fears about the recovery.

The government’s main economic barometer rose for the fifth straight month in May, the Commerce Department said Tuesday. But the modest 0.6% advance failed to relieve concerns about the fragility of the recovery.

The department said its index of leading economic indicators advanced 0.6%, suggesting continued, but less-than-robust, growth later this year.

The index, designed to forecast activity six to nine months ahead, was an upbeat exception to a recent spate of weak or negative statistics.

“We were beginning to worry that the flattening out of the economy could turn into a downturn,” said Sung Won Sohn, an economist with Norwest Corp. in Minneapolis. “But the leading indicators are saying we will have better times down the road. Let’s hope they know what they’re talking about.”

Still, the 0.6% gain, which had been expected, was less than half the average growth after the 1981-82 recession, when the index posted monthly gains of about 2%.

May’s advance was narrowly based. Only five of the 11 indicators rose, although they were weighted more heavily and thus offset the negative contributions of the other six components.

Another report Tuesday illustrated the recovery’s weakness. A Conference Board survey showed that consumer confidence flattened in June after improving three straight months.

The New York business research group’s widely followed consumer confidence index registered 71.7 in June, virtually unchanged from May’s 71.9.

Fabian Linden, executive director of the board’s Consumer Research Center, said consumers continue to worry about the economy.

Other reports have been less encouraging than the leading indicators. Housing sales are down, incomes are barely creeping up and joblessness remains at troubling levels.

Nikko Securities’ chief economist, Robert Brusca, who once believed that the gross domestic product could grow at 4.5% in the quarter that ended Tuesday, now expects 3.3% growth.

He still believes that the economy will grow at a 4.5% annual rate from the second quarter of 1992 through the first quarter of 1993.

Index of Leading Indicators

Seasonally adjusted index, 1982 = 100

May, ‘92: 149.9

April, ‘92: 149.0

May, ‘91: 143.9

Source: Commerce Department

Consumer Confidence

From a monthly survey of 5,000 U.S. households

1985 = 100

January, ‘91: 78.0

June, ‘92: 71.7

Source: The Conference Board