The economic outlook improved in December but continued to exhibit sluggishness, The Conference Board reported today.
The U.S. leading index, a key barometer of future economic conditions, gained 0.3 percent last month to 138. Based on revised data, the two previous monthly gains were downsized to no change in November and a 0.1 percent decrease in October.
From June to December, the leading index rose 0.1 percent (a 0.3 percent annual rate), but it is still 0.1 percent below its December 2005 level and 0.4 percent below its most recent high in January 2006, and the strengths among the leading indicators have not been very widespread.
In December, negative contributions from the interest-rate spread and index of consumer expectations were offset by large contributions from building permits and jobless claims, followed by stock prices, vendor performance and manufacturers’ new orders for nondefense capital goods.
At the same time, real GDP growth slowed to a 2 percent (annual) rate in the third quarter of 2006, following a 2.6 percent gain in the second quarter.
The Conference Board said the recent behavior of the leading index still suggests that slow to moderate economic growth is likely to continue in the near term.