PROVIDENCE - Following a drop of 1.9 percent in June, an index of America’s leading economic indicators gained 1 percent in July.
The e-forecasting.com U.S. Leading Economic Indicator Index rose to 117 where a reading of 100 is equivalent to the country’s economic activity in 2000.
On a year-over-year basis, the index increased by an annual rate of 4.2 percent compared to July of 2011.
The index’s six month growth rate was 4 percent in July, the first positive change after 5 months of decline.
According to the report, July’s figure compares with a long term growth rate of 3.3 percent during 1959 to 2010, which is equal to the growth rate in real GDP.
In July, three of the seven components that make up the index improved – stock prices, housing activity and manufacturer’s productivity.
Four components – manufacturers’ new orders, consumer expectations, interest rate and foreign demand – contributed negatively or had zero contribution during July.
The probability of an impending recession in the U.S. registered 19 percent in July, dropping from June’s high probability of more than 50 percent. Typically, if the figure is greater than 50 percent for three consecutive months, the U.S. enters an economic recession, according to the report.