Economic Gauge Posts Large Gain

A key forecasting gauge of the U.S. economy posted its biggest jump in seven months in January, a positive sign for economic growth, the Conference Board said Tuesday.

The U.S. leading economic indicators index rose 1.1% to a record 140.1, the private research firm said, a rise both it and other economists said might have been due to exceptionally warm January weather.

“Even though the gains this month are in fact indicative of a sustainable economic expansion, the magnitude of the gain was a bit exaggerated,” said Anthony Chan, managing director and chief economist for JPMorgan Private Client Services.

According to government weather scientists, January 2006 was the warmest January on record in the United States.

January’s rise was the fourth straight monthly advance in the index, the New York-based research firm said. It trounced financial market expectations of a 0.6% gain and followed an upwardly revised 0.3% increase in December.

The index, which measures indicators including unemployment benefit claims and building permits, is meant to forecast economic trends three to six months ahead.

Chan said February’s leading index gain was unlikely to be as strong as January’s weather-skewed result.

Conference Board economist Ken Goldstein said the numbers boded well for second-quarter growth.

The January surge in the index matched a 1.1% increase logged in June, the Conference Board said.