Indicators Up Slightly in June

A gauge of economic activity improved slightly in June for the third consecutive month, buttressing the view that the nation is on the cusp of a financial recovery even if signs of weakness persist.

The Conference Board reported Monday that its index of leading economic indicators increased 0.1% in June to 111.8, in line with analysts’ expectations. However, with high unemployment and weakness in the manufacturing sector, economists said it was too soon to know whether the United States was about to enjoy a period of steady economic growth.

“The rebound in the economy is still more of a forecast than a fact,” said Douglas Porter, senior economist at Nesbitt Burns Securities of Chicago.

“There’s no question that there are still clouds over the economy and the darkest cloud is the employment picture,” he said. “Still, the underlying sense is that things are improving.”

Four of the 10 components of the leading indicators index rose in June, including the real money supply, stock prices and building permits, the New York-based Conference Board said.

Among the components that declined in June were consumer expectations and manufacturers’ new orders for consumer goods and materials. Manufacturing hours and new orders for non-defense capital goods were unchanged.

The leading index, which rose 1.1% in May and 0.1% in April, is supposed to measure where the overall U.S. economy is headed over the next three to six months. It stood at 100 in 1996, its base year.

The board’s coincident index, which measures current economic conditions, increased 0.1% in June, while the index of lagging indicators dropped 0.5%.

“I still think we need to be a little cautious,” said Conference Board economist Ken Goldstein.