A key forecasting gauge for the US economy rose 1.2 per cent in December, its largest gain in almost six years, a private research firm said today, suggesting the economy could recover in the months ahead.
The Conference Board reported that the US index of leading economic indicators rose 1.2 per cent in December after an increase of 0.8 per cent in November. The December rise was the largest since February 1996, the board said.
The December rise exceeded expectations of Wall Street economists who had forecast the index to grow by 0.8 per cent, as the economy still suffered from the aftershock of the September 11th attacks on the United States.
"The strong signal from the indicators means that the recession could be over soon," the board's chief economist, Mr Ken Goldstein, said in a statement. He noted the leading index has been growing strongly over the past three months.
Mr Goldstein said that aggressive monetary policy on the part of the Federal Reserve, as well as a growth in the money supply, retail discounts and a fall in energy prices were contributors to "the re-emergence of economic momentum."
The lagging index, which measures past trends in the economy, rose 0.1 per cent last month after a 0.3 per cent drop in November.
Eight of the 10 components that make up the leading indicators index rose in December, led by jobless claims, the treasury yield curve, money supply and the average workweek.
Two components, capital goods orders and manufacturers' new orders, fell in December.