November Gains Signal Healthy Growth in ’99
A major forecasting index for the U.S. economy rose at the fastest rate in nearly three years during November, pointing to robust growth in 1999.
The Conference Board said Wednesday its Index of Leading Indicators rose 0.6% last month to 106.3, its biggest rise since February 1996. The November gain, which followed a 0.1% rise to 105.7 in October, beat economists’ forecasts for a 0.4% increase.
Money supply and the behavior of Treasuries prices were seen as harbingers of strength in the report, but the strongest component in the index was stock prices, which saw a huge rebound in November after turbulence in August and September.
“In the simplest terms, I think it is a very reassuring statement that there’s not going to be a recession in the U.S. in 1999,” said Stuart Hoffman, chief economist at PNC Bank Corp.
Despite the strength, some economists were hesitant to read too much into the number.
“I wouldn’t bet the ranch on this one,” said David Wyss, chief economist at DRI/McGraw-Hill.
The 0.6% increase was less impressive in light of the fact that since May, the index was only up about 0.9%, he said. “It’s consistent with what we believe. Growth is going to slow, but it’s still going to be a pretty decent year.”
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Index of Leading Economic Indicators
Seasonally adjusted index, 1992=100
* Source: Conference Board