Leading Indicators Up 0.1%; New Home Sales Plunge : Economy: Index points to healthy but unspectacular growth. Analysts are unfazed by home buyers’ retreat.

The government’s main forecasting gauge of future economic activity inched up in January, suggesting a steady but modest expansion this year.

Meanwhile, new home sales plunged during the month. Analysts weren’t unduly alarmed, though. They said the drop was partly related to bad weather and that they expect low mortgage rates will entice more people into buying homes later this year.

The Commerce Department said Tuesday that its index of leading indicators edged just 0.1% higher in January. Usually that would be taken as a prognosticator of near stagnation, but it followed a large 1.7% jump in December, the biggest in nearly a decade.

Taken together, the two months portray an economy poised to grow at a healthy though far from spectacular pace, analysts said.

“The economy slowed somewhat in early 1993, but it still has a lot of forward momentum. . . . We should do pretty nicely the first half of this year,” said economist Bruce Steinberg of Merrill Lynch.

In a separate report, the department said new home sales in January plunged 13.8% to a seasonally adjusted annual rate of 561,000. It was the biggest drop in 11 years.

Analysts expect increasing home sales in the months ahead will be one of the economy’s bright spots, with spinoffs into manufacturing as people buy new furniture and new appliances for the homes.

“The housing sector will continue to be a leading sector for the economy. The only impediment is the jobs sector, and that should improve as the year progresses,” said economist Mark Zandi of Regional Financial Associates of West Chester, Pa.

Economists predict overall growth between 3% and 3.5% this year in the gross domestic product, the sum of all goods and services produced in the United States.

That’s a marked improvement over 2.1% for all of last year but more subdued than the 4.8% pace in the fourth quarter.

“We will see further improvement, but that improvement will be moderate and modest,” Zandi said.

The leading index, while far from perfect, is designed to predict movements in the economy six to nine months in advance. Three consecutive declines are often taken as a warning of impending recession.

With January’s small increase, the index now has risen for five consecutive months. It last fell in August.

Five of the index’s 11 forward-looking indicators were positive.

New Home Sales Seasonally adjusted annual rate, thousands of units Jan., ‘93: 561 Dec., ‘92: 651 Jan., ‘92: 676 Source: Commerce Department