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Archive for Tuesday, April 20, 2004

Economy ‘picking up steam’ in second quarter

Leading indicator index edges higher in March

April 20, 2004

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— A barometer of future economic activity edged higher in March, following a pause in February, suggesting that the economic recovery may be gaining a more solid footing.

The Conference Board, a private research group, also reported Monday that its indicator of current economic activity rose for the seventh straight month in March, indicating that economic momentum was remaining strong going into the second quarter.

The group's Composite Index of Leading Economic Indicators rose 0.3 percent in March, following no change in February and a 0.4 percent rise in January. The report was in line with what analysts were expecting, and the financial markets showed little reaction.

The indicator, which forecasts trends in the economy during the next three to six months, is comprised of 10 indicators of future economic activity. Six of those indicators rose last month, including real money supply, building permits and new orders for consumer goods to manufacturers.

Ken Goldstein, an economist at the Conference Board, said the leading index remained on an upward trend, auguring well for the economy: "Economic growth in the first quarter was strong and the second quarter may be as good or better."

"The economy looks like it's picking up steam," said Standard & Poor's economist David Wyss. "And if this is a standard U-shaped recovery" -- with a long bottoming-out period -- "we should be getting to the steep part of the upward curve."

The upturn in the leading index in March left the indicator 4.4 percent higher than its most recent low in March 2003, though the group noted that growth in the indicator had "slowed somewhat in recent months."

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